Next year a significant oil and gas exploration offshore is set to start in the first 3 months of next year.
Tatweer Petroleum has formed a partnership with Italian firm Eni to search for deposits in a place called“offshore block one”, which spans about 2,800 km.
Oil Minister Shaikh Mohammed bin Khalifa Al Khalifa told MPs yesterday preceding attempts bore no success , but hoped that Eni’s experience in offshore operations would turn that around.
A study of the area, where water reaches depths in excess of 70 meters, had already been done by Eni. Eni also signed a Memorandum of Understanding (MoU) with the National Oil and Gas Authority at the start of this year.
According to Shaikh Mohammed the terms were fair for Bahrain if any reserves were to be located.
“It was a very good agreement, with Bahrain’s taking up to 80pc of the share if there are oil discoveries,” according to him.
“This is besides a 46pc oil and gas income tax on Eni.
“The agreement comes at a time when oil prices have dropped and companies are reluctant to get involved in oil exploration that may or may not be successful.
He also said that they completed a two-year study plan before going with the agreement.
Many MPs were reserved to the deal, citing that there were not enough guarantees regarding the environmental protection.
The minister however, was able to allay said concerns.
He was reported to say , “The deal has been negotiated by the best in the field in Bahrain, in the interests of the country and future generations – in respect to the environment, training, labour and other rules and laws that govern the company’s work,”
His Majesty King Hamad previously issued a Royal Decree during the National Assembly’s recess, allowing Noga and Eni to sign an oil exploration and production sharing agreement.
Certain MPs yesterday stated that the decree be suspended indefinitely, which caused financial and economic affairs committee chairman MP Ahmed Al Salloom to respond that he would reconsider the agreement.
The deal however is likely to be approved next week when MPs are due to vote retrospectively on the decree.