64 December 2011 BTM oldest in the region, having been discovered back in 1932. The field had experienced many years of production decline before Tatweer took over operations in December 2009. The main operator of the oilfield, Tatweer oversees a consortium of international experts including US-based Occidental and UAE’s Mubadala who have been signed on to overhaul the field using the latest technology under a development and production sharing agreement. Following a raft of production enhancements programmes, the decline was finally reversed. Oil production went up from 32,000 barrels per day (bpd) in the previous year to 40,000 barrels bpd in 2011. The gas production averaged around 1.3 billion standard cubic feet per day from the onshore Bahrain field. Over the next five to seven years, the government has ambitious plans to triple production from the Awali field, to at least 110,000 bpd, around which production will remain stable until 2028. This would mean that the Kingdom would be assured of an indigenous oil supply at least for the next 15 years while it looks to secure gas supplies overseas. Meanwhile, Bapco has successfully completed the drilling of three gas wells as part of a US$100 million programme that is intended to boost natural gas production in Bahrain by an additional 500 million cubic feet per day. The project which involves drilling a total of eight new deep gas wells in the Khuff gas reservoir, aims to meet the Kingdom’s growing demand for natural gas for power generation and local industries until 2014. Besides the eight new wells, it envisages the further development of five previously-drilled wells at the same reservoir. In spite of efforts to diversify its economy, Bahrain still relies heavily on oil and oil prices. Income from oil-related business accounts for over 70 per cent of the government’s budget. As the Kingdom now makes renewed efforts to revamp its energy sector, more than US$20 billion is expected to be pumped into developing the oil and gas sector over the next 20 years. This includes an investment of US$15 billion in the development and modernisation of Bahrain’s flagship Awali oil field, a project termed the Bahrain Field Phased Development Project (BFPDP). Another US$5 billion is estimated to be spent on expansion and modernisation of the Bapco refinery at Sitra. The BBC sometimes refers to Bahrain as an ‘oil rich’ nation in its reporting on the Kingdom; the reality is rather different. The investments in the energy sector over the coming years are designed to raise the Kingdom’s oil production to around 110,000 barrels per day (bpd) and double gas production to 2.5 billion standard cubic feet per day. At these levels, the Kingdom will be able to meet local demand for energy in the short- to medium-term. These are production levels, even with a significant stretch of the imagination, that one would have difficulty assigning an ‘oil rich’ label to a country. A more appropriate comment would be to suggest that Bahrain is an energy scare country within an extremely rich energy region. A rough start Perhaps the biggest challenge faced by Tatweer Petroleum during the course of 2011 lay in arresting the steady decline in Bahrain’s oil production. The Awali oil field in Bahrain is the annualreview On the Road to Renewal Having successfully arrested the decline of its lone oil-producing field, Bahrain is set to witness some big-ticket investments in its oil and gas sector over the coming years.
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