Bahrain’s new oil discovery may exceed 80 billion barrels

Bahrain’s largest oil discovery in decades contains quantities of tight oil that may exceed 80 billion barrels, officials said on Wednesday.

The Gulf island kingdom reported the finding of the resource off of its west coast on Sunday, its largest discovery since 1932.

Read: Bahrain discovers largest oilfield in decades

It said the 2,000-square-kilometre discovery area was expected to contain main times the amount of oil produced by Bahrain’s existing fields – the onshore Bahrain field and the offshore Abu Safah field.

In a further update on Wednesday, Bahrain News Agency (BNA) quoted oil minister Sheikh Mohammed bin Khalifa Al Khalifa as confirming the 80 billion figure “based on technical data after all studies and analyses of available information”.

Independent appraisals by US-based oil consultants DeGolyer and MacNaughton and oilfield services company Halliburton confirmed the find.

نائب رئيس شركة ديماك: كميات النفط الخفيف والغاز المصاحب التي قد تتجاوز 80 مليار برميل مبنية على البيانات الفنية بعد اجراء جميع الدراسات والتحاليل للمعلومات المتوفرة

— وكالة أنباء البحرين (@bna_ar) April 4, 2018

Tight oil is a form of light crude found in shale deposits extracted through hydraulic fracturing. Is is not yet clear how much of the 80 billion barrels is recoverable but the kingdom said it would work with global oil service companies to develop the resources.

Officials expect production to begin within five years.

“Agreement has been reached with Halliburton to commence drilling on two further appraisal wells in 2018, to further evaluate reservoir potential, optimise completions, and initiate long-term production,” Sheikh Mohammed told a news conference in Manama,” according to Reuters.

The kingdom also estimates the resource contains 10-20 trillion cubic feet of deep gas. The oil minister said Bahrain was evaluating bids from two service companies following a geological evaluation over the last two years.

The discovery comes at a fortunate time for Bahrain, which has been among the hardest hit in the Gulf region by lower oil prices.

S&P estimates its ratio of government debt to gross domestic product jumped to 81 per cent last year. Rival ratings agency Moody’s expects government debt to reach 100 per cent of GDP by 2019. Both have given Bahraini debt junk ratings.

Read: Bahrain’s labour force shrinks in 2017

Prior to the find, the country’s reserves stood at 124.6 million barrels of crude and 92.03 billion cubic metres of natural gas, according to the CIA Factbook.

This compared to 266.5 billion barrels of crude and 24.3 trillion cubic metres of gas held by neighbouring Saudi Arabia and Qatar respectively.