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Shaikh Mohammed ... targeting US companies

Shaikh Mohammed ... targeting US companies

Bahrain talking to US firms on tight oil deal

MANAMA

Bahrain is talking to US oil companies with shale oil expertise about developing a huge oil and gas field discovered last year, and hopes to have an interested company by the end of the year, the kingdom’s oil minister said. Last April Bahrain said it had discovered its largest oil and gas find since 1932 off its west coast, estimated to contain at least 80 billion barrels of tight oil.

The first test well is being drilled now, Oil Minister Shaikh Mohammed bin Khalifa Al Khalifa told Reuters in an interview. "We should have it flowing ... maybe by the end of April."

Tight oil is a form of light crude oil held in shale deep below the earth’s surface that is extracted with hydraulic fracturing, or fracking, using deep horizontal wells.

Shaikh Mohammed said the recovery rate for shale deposits is around 5-15 per cent of available reserves.

He said Bahrain is targeting major US oil companies and independent companies which have "operating capabilities in US shale, because tight oil is very much a US phenomenon now".

No deal for the tight oil areas has been signed yet, he said.

The small non-Opec Gulf oil producer, with around 124.6 million barrels of proven reserves, gets its oil revenue from two fields: the onshore Bahrain field, and the offshore Abu Safah field, which is shared jointly with Saudi Arabia. Bahrain and Saudi Arabia split annual revenues from the 300,000 bpd Abu Safah field, where production is overseen by Saudi Aramco.

Al Khalifa also said state-run Bahrain Petroleum Company (Bapco) is "a few weeks away" from financial close on funding for the capacity expansion of its existing Sitra oil refinery.

Five export credit agencies from Korea, Spain, Italy and Britain, alongside international and Bahraini banks will provide more than $4 billion in financing, he said.

The expansion will increase Bapco’s refining capacity to around 400,000 barrels per day, from around 270,000. Around 88 per cent of the crude that Bapco refines comes from neighbouring Saudi Arabia, and the rest from Bahrain’s field.




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