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Bahrain finds large reserves of tight oil and deep gas

Apr 05, 2018
3 min read
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Bahrain’s National Oil and Gas Authority (NOGA) said the Kingdom’s major discovery has estimate reserves of 81.5 billion barrels of tight oil located in the Khalij al Bahrain basin and deep gas reserves of 13.7 trillion cubic feet.

The country’s largest oil discovery in decades is off the West coast in shallow water. Separately, deep gas has also been discovered in two accumulations below Bahrain field, Bahrain News Agency said in a statement quoting government officials.

“Independent appraisals have confirmed NOGA’s find of highly significant quantities of oil in-place for the Khalij Al Bahrain, with tight oil amounting to at least 80 billion barrels, and deep gas reserves in the region of 10-20 trillion cubic feet,” Bahrain’s Minister of Oil, Shaikh Mohammed bin Khalifa Al Khalifa said. The independent appraisals come DeGolyer and MacNaughton and Haliburton.

While the discovery is significant in size, more information is needed to establish how much of the resource is commercially recoverable and its classification would pose production challenges, Tom Quinn, senior analyst, Middle East upstream, at Wood Mackenzie, said.

“A tight reservoir means a low recovery factor and only a fraction of the 80+ billion barrels is likely to be recoverable. The oil will also be technically challenging and potentially high cost to develop,” Quinn said.

Bahrain’s oil minister said Halliburton will start drilling two more appraisal wells this year in the offshore basin to evaluate how much of the oil reserves are recoverable.

Positive test well results have successfully demonstrated the productivity of the significant resource, with Schlumberger, who performed the first test well drilling and Bahrain Petroleum Company (Bapco) has already succeeded in flowing high quality oil from the wells during the testing and flow back phases, the statement said.

"Based on the core analysis carried out on several wells the formation could be classified at the edge of the conventional-unconventional type of plays," a Schlumberger spokesperson said.

The first well in the drilling programme is planned to produce in August, and over the next two years focus will be given to maximising production and commercial efficiency.

Bahrain is currently facing declining production from its onshore field – its production in 2014 was about 50,000 barrels per day, according to the latest government figures. Bahrain also receives 150,000 bpd from the Abu Sa’fah field, which is shared with Saudi Arabia. Bahrain imports crude from Saudi Arabia through a pipeline which is currently being expanded, with crude being supplied to the Sitra refinery, which is also being expanded to nearly double production capacity.

The Kingdom is also building on offshore LNG import terminal which will have an initial capacity of 4.1 billion cubic meters (bcma) with the potential to expand to 8.2 bcma.

It is likely that Bahrain will need this gas import capacity until the new discoveries come onstream, and may still require it for peak summer demand beyond, Quinn said, adding “Again, further appraisal will be required and suitable commercial terms agreed to establish if the deep gas resource is commercially viable.”

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