The Demise of Shale Oil Lie
2023-10-06 - 3:58 p
Bahrain Mirror (Exclusive): The recent announcement by Italy's Eni company, signaling its withdrawal from the shale oil exploration project, marks a somber conclusion to one of the most misleading narratives in Bahrain's history.
The shale oil party has come to an end, with little prospect of a swift revival. The exorbitant investment required for this endeavor remains beyond the reach of international oil companies, and the lone company that dared to undertake this challenge failed to yield any positive results.
In 2018, Bahrain's King Hamad bin Isa Al Khalifa had captivated the nation with news of a shale oil discovery, estimating reserves at a staggering 80 billion barrels. Fast forward five years, and Eni's announcement reveals that it has not borne fruit, forcing them to relinquish their exploration assets in Block 1 off Bahrain's coast.
Back in June 2022, Mark Thomas, the CEO of Bahrain's oil and gas holding company NOGA Holding, disclosed that Bahrain had halted shale oil exploration, instead focusing on technical and financial feasibility studies. This decision came in the wake of the prohibitive drilling costs. Thomas cited the lack of a precise estimate regarding recoverable reserves as the reason for evaluating the Bahrain Gulf field further.
The authorities had promoted this false narrative as a means to elevate itself and enhance Bahrain's economic standing. However, time has exposed the truth. Still, there's another story that awaits verification-one that Chairman Nasser bin Hamad of Bahrain's oil and gas holding company, "NOGA Holding," unveiled on November 8, 2022, regarding two discovered reservoirs in the unconventional "Al-Juba" and "Al-Jawf" layers beneath the gas-producing Al-Khuf and Al-Onaiza reservoirs in Bahrain, as reported by BNA.
Nearly a year has passed since this announcement, with Bahrainis witnessing no tangible progress or promising developments. Instead, the Bahraini Ministry of Oil stated last June that incorporating new explorations into the budget for this year is challenging, and perhaps even by the end of 2024. This equivocal statement contrasts with the transparency and clarity expected of a government agency addressing its citizens.
It's worth recalling the king's address during the inaugural parliamentary session, where he hailed the anticipated benefits of natural gas reservoirs, as announced by his son, Nasser. Now, at a juncture demanding truthfulness, there are no new revenue streams, no confirmed discoveries-just assurances laden with the word "perhaps."
Presently, Bahrain has a single field production estimated at 1.6 billion cubic feet per day, all of which is domestically consumed. In response to inquiries before the Bahraini Shura Council in April 2023, Minister of Oil and Environment Mohammed bin Mubarak bin Daina did not unveil any additions to gas production. Instead, he outlined plans to curtail domestic consumption to facilitate gas exports.
The era of the shale oil lie has concluded, leaving us eager to learn the outcome of Nasser bin Hamad's discoveries in natural gas reservoirs.