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Tatweer prepares for new oil deals

Bahrain’s Tatweer Petroleum Co. expects to sign exploration and production sharing agreements (EPSAs) with international oil companies soon as it seeks to monetise resources in the island’s offshore.

The move follows significant work carried out over the past two years by Tatweer to establish target areas through an advanced aerial geological survey of large swathes of land as well as a high-resolution geophysical survey covering most of its offshore and the drilling of exploratory wells.

Data has now been processed, with Tatweer understood to have identified several offshore areas with significant potential for oil and gas reserves.

The company is now hoping to attract investors to offshore blocks.

Following the April 2018 discovery of the offshore Khaleej Al Bahrain (KAB) field, the government’s National Oil & Gas Authority (NOGA) – Tatweer’s parent – initiated talks with IOCs, primarily those engaged in the US shale industry, about developing the asset. KAB is estimated to hold 80bn barrels of tight oil.

Halliburton was contracted to carry out initial drilling and well tests in the 2,000-square km area, with Italy’s Eni signing an EPSA in January 2019 to explore the 2,800-square km offshore Block 1 area to the north of the main island. In February 2020, the Italian firm signed a memorandum of understanding (MoU) with Tatweer to explore collaboration in various domains, including gas.

Three months later, a letter of intent (LoI) was signed between NOGA’s investment arm nogaholding and shale-specialist Chevron calling for the US major to assist Tatweer in evaluating the basin. No further details on the terms of the accord were disclosed.

Drilling by Eni in Block 1 had been due to start in 2020, but was delayed on account of the coronavirus (COVID-19) pandemic.

In November, Tatweer’s director-general of petroleum exploration and development, Yahya Al Ansari, announced plans to drill eight new offshore wells to a depth of 8,000-13,000 feet (2,438-3,962 metres) and a horizontal extension of 914-3,000-plus metres.

He added: “We are talking about another major discovery with 80bn barrels, an oilfield which requires a special infrastructure, transmission pipelines and facilities, technology equipment to suit each drilling and production stage. All this needs patience and meticulous planning. Such efforts will contribute to the kingdom’s growth and welfare of future generations.”

The onshore Awali field, the site of the GCC’s first oil find in 1932, remains the kingdom’s sole source of domestic production of around 46,000 barrels per day. Manama also receives a 50% share of the 150,000 bpd produced by Saudi Aramco at the offshore Abu Sa’fah, which is pumped alongside a further 75,000 bpd of Arabian Light crude from the Abqaiq processing facilities in Saudi Arabia’s Eastern Province via the 350,000 bpd Saudi-Bahrain A-B oil pipeline.