Eni has continued its run of wins in the Middle East with the signing of a new exploration deal in Bahrain, the Italian oil company announced on 13 January.
Eni signed a memorandum of understanding with Bahrain’s National Oil & Gas Authority (Noga) to explore for oil and gas in the kingdom’s offshore Block 1 area.
The 2,800 square-kilometre block, which lies in the northern waters of Bahrain with depths ranging from 10m-70m, is still largely unexplored.
“With this signing, we aim to hold various discussions to review all relevant aspects of the technical and commercial terms of the potential exploration and development within a reduced timeframe,” Bahrain’s Oil Minister Sheikh Mohamed al-Khalifa said in a statement.
“Entering Bahrain will enable our company to expand its presence in a key region of the Middle East, in line with our strategy aimed at diversifying our exploration portfolio across basins with liquid hydrocarbon potential, while keeping high-quality stakes throughout the exploration phase,” Eni CEO Claudio Descalzi added.
The deal represents a first for Eni in Bahrain, one of the oldest oil producers in the region, but also one of the smallest. The kingdom produced about 213,000 barrels a day (b/d) in 2017, according to Noga. The majority of its output comes from the offshore Abu Safa field, jointly owned with Saudi Arabia. Only about 20 per cent comes from the onshore Bahrain field.
Bahrain announced the discovery of the Khaleej al-Bahrain basin, a major new shale oil and tight gas resource basin off the western coast, last year, which could hold more than 80 billion barrels of shale oil in place, along with 20 trillion cubic feet of gas.
State-owned Bahrain Petroleum Company has been in talks with unnamed international oil companies to partner on the development, with a target of producing up to 200,000 b/d, although it is yet to conclude a deal.
Middle East growth
The new Eni deal is the latest in a string of awards for the company. Earlier in the day, it announced the signing of three blocks in the UAE’s Sharjah emirate from the first exploration bid round held by Sharjah National Oil Corporation (SNOC) last year.
Just a day earlier, Eni signed another deal with Abu Dhabi National Oil Company (Adnoc) for two more offshore concession areas, along with Thailand’s state-owned PTT Exploration & Production Public Company.
The blocks are close to the Ghasha sour gas field, another Abu Dhabi offshore concession, in which Eni was awarded a 25 per cent stake in November.
While Eni also has operations in Iraq and Libya, it is looking to the Gulf region for growth opportunities, with a presence in Oman, the UAE and now Bahrain.
Speaking to journalists at an energy conference in Abu Dhabi on 13 January, Descalzi said the region could represent more than a third of its oil production in the coming years.
“In five, six, seven years, I think [it could] cover about 35 per cent of our revenue – that is my guess and objective. Now it is very little,” he said.
“Our key driver is diversification. In the last six or seven years, we discovered so much in Africa that our centre of gravity became Africa, which is good. But it’s very important to diversify from a commercial point of view,” the CEO added.
|This article has been unlocked to allow non-subscribers to sample MEED’s content. MEED provides exclusive news, data and analysis on the Middle East every day. For access to MEED’s Middle East business intelligence, subscribe here|