US oil giant Occidental will begin drilling for gas at the Bahrain Field “any time now”, Energy Minister Dr Abdulhussain Mirza said at the opening ceremony of the MEOS 2011 event in Manama.
“Cabinet approval for the deal has been received and a royal decree is set to be issued this week,” Dr Mirza told reporters of the Gulf Daily News on the sidelines of the conference plenary session.
“Immediately after that, the company will start work. This is a major step forward for Bahrain’s oil and gas industry,” he said.
“We will now be able to drill deeper than ever before,” he said.
Occidental will carry out drilling for gas at depths of up to 20,000 feet and Bahrain would not be charged for the operations since all drilling costs would be borne by the company for the first seven years by then it would be known whether they have found results.
He said if gas were to be found, there would be a negotiation process but if there is no gas, it would not be a financial loss to Bahrain. The cost of operations to Oxy over the seven-year period could be between $100-200 million.
Back in December last year it was announced that Oxy had won the contract to drill for deep gas onshore Bahrain.
Dr. Mirza, said at the time that Oxy would carry out drilling for gas at depths of up to 20,000 feet and Oxy would bear all costs for the drilling operations.
Banagas general manager Shaikh Mohammed bin Khalifa Al Khalifa had said earlier in 2010 that Bahrain would drill eight gas wells to meet additional demand expected over the next five years until 2014. The operation will cost $200 million.
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