Occidental Petroleum (Oxy) has won a contract to drill for deep gas onshore Bahrain according to a report by the island Kingdom’s news daily, Gulf Daily News.
Bahrain’s Oil and Gas Affairs Minister and National Oil and Gas Authority (Noga) chairman Dr. Abdullah Mirza, said that Oxy would carry out drilling for gas at depths of up to 20,000 feet and that it would not charge Bahrain for the operations.
“All drilling costs would be borne by the company for the first seven years by when it would be known whether they have found results,” he told the paper.
“If gas is located, there will be a negotiation process but if there is no gas, it would not be a loss to Bahrain,” he said adding that cost of operations to Oxy over the seven year period could cost between US$100-200 million.
The minister said that the agreement was a framework with detailed negotiations and final agreements expected to be reached in the next few months before the drilling process could begin.
According to the report, Bahrain National Gas Company (Banagas) general manager Shaikh Mohammed bin Khalifa Al Khalifa had said earlier 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.
To date, three of the eight wells have been drilled and completed as part of the Khuff gas drilling programme and a drilling rig has been mobilised to the fourth well where drilling has begun.
