Bahrain signs exploration deal with Thai company
Posted: 03 March 2008
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Bahrain has signed a new oil exploration deal with a major Thai company, hoping that the contract will bring a wave of oil discoveries after 75 years, Bahrain media reported.
Bangkok-based E&P, PTT Exploration and Production (PTTEP) will operate Block 2, located offshore in the north of Bahrain which covers about 2,228 square kilometres.
Oil and Gas Affairs Minister Dr Abdulhussain Mirza signed an Exploration and Production Sharing Agreement with PTTEP, under which the company will be drilling two wells offshore in the Khuff formation.
He said in a statement, the total exploration period will be six years, and in case of a discovery, the production term will be 24 years.
Thailand’s PTTEP and US major Occidental were awarded exploration rights last year to explore three out of four Bahraini blocks. Occidental will operate Blocks 3 and 4 to drill three wells to the Arab Formation. Block 1 will remain for future bidding.
He regarded the new contracts as ‘a milestone in the process for the development of oil and gas resources and the beginning of other future projects in this sector.’
Dr Mirza said the soaring cost of oil, which this year hit $100 per barrel, meant even a small or medium sized discovery made the project economically viable.
He is confident the project will be successful and pointed to PTTEP’s track record in establishing international ventures in Iran, Algeria, Egypt and Oman.
He told Bahraini daily Gulf Daily News, that the government would not bear any drilling expenses from the scheme and said if oil was discovered Bahrain would split its production with the company.
PTTEP president Khun Mrigadat said the company was unlikely to start drilling until next year, when it has completed a geological study and seismic survey of the area, at a cost of $13 million, the report said.
In 2006, Bahrain produced about 35,000 bbpd of crude oil. Its proven oil reserves stood at about 125 million barrels as of January 2007. Over the years, Bahrain has been slow to explore for oil in its offshore waters.
Unlike most GCC-countries, Bahrain imports about 225,000 bbpd of Arab Light crude oil from Saudi Arabia, for which it shares production via a subsea pipeline linking the two countries.
Bahrain, where the first oil field in the Gulf was developed, aims to encourage foreign investment in the upstream sector and possibly to step up exploration efforts to revive its former glory. |
