ASSESSMENTS

Tiny Bahrain's Big Oil Discovery Will Boost the Country’s Fortunes -- Eventually

Apr 5, 2018 | 17:03 GMT

A map shows the location of Bahrain in the Middle East.

The news of a massive oil field discovery could be game-changing for Bahrain.

(200MM/iStock)

Highlights

  • Bahrain's discovery of the Khaleej Al Bahrain oil and gas field has the potential to make a material change in the country's financial crisis, but there are roadblocks.
  • It will be five to 10 years before production begins in substantial volumes, it will be expensive, and it's not clear how much of the oil and gas can be recovered.
  • In the meantime, Bahrain will use the long-term potential of increased oil and gas production — and the state revenue that comes with it — to attract new investment.
  • An increase in oil revenue will allow the country to boost some of the social services that it provides to its restive population and reduce the need for painful economic adjustments.

Bahrain's leadership is optimistic that the country's economic fortunes will improve after the government announced its largest ever oil discovery. On April 4, Oil Minister Mohammed bin Khalifa al-Khalifa revealed that Bahrain's recently discovered oil and gas field, Khaleej Al Bahrain, holds an estimated 81.5 billion barrels of oil and 390 billion cubic meters of associated gas in place. Two Western firms have confirmed those numbers in independent appraisals, and Bahrain's government is working with Halliburton Co. to drill two more appraisal wells this year....

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