Bahrain, the first to discover oil in the Gulf, has not experienced a significant find for 75 years. But that could change in the near future as the kingdom is in the thick of exploration initiatives to strike substantial veins of black gold.

And as a museum stands on the site of the Gulf’s first oil well, history books will show that 2008 was the year in which the Gulf’s smallest oil producer took major strides towards re-establishing itself to a position of importance in the regional oil and gas industry.
Under the confident stewardship of National Oil and Gas Authority (Noga) chairman Dr Abdul-Hussain bin Ali Mirza, Bahrain stepped up new initiatives across its energy sector – from an upgrade of its existing onshore Awali field, to major offshore exploration in partnership with international oil companies (IOCs) and ongoing negotiations with its neighbours to secure the gas supplies crucial to maintaining the country’s bullish economic growth.
Among the country’s most ambitious projects is the upgrade of the Awali field where oil was first discovered in 1932.
Three companies – ExxonMobil, Occidental and Maersk – have been short-listed for an initiative which could cost as much as $5 billion and it is hoped will double daily oil production from the field to around 70,000 barrels a day.  
Occidental is also leading the country’s offshore exploration efforts – the US firm successfully bidding for the right to explore three of the four offshore blocks covering Bahrain’s entire offshore acreage which were offered last year. Thai state oil firm PTT Exploration won the right to explore the fourth block, the two firms selected for the expertise having participated in similar initiatives elsewhere in the region.
Asked whether they are likely to find oil in extractable quantities, Dr Mirza is diplomatic but optimistic.
“My standard answer is that these companies spent more than $60 million and they would not have spent it if they did not think there was a chance of finding something,” he says.
Elsewhere, with Bahrain’s booming economy forecast to continue to grow strongly the country has been in negotiations with other Gulf nations to import gas by pipeline to ensure its growing industrial sector and rising population can be ably supported in the future.
With Qatar having placed a moratorium on future gas deals as it conducts a survey of its huge North Field – but having assured Bahrain it will be first in line when it feels able to conclude new agreements in the future – attention has turned to Iran, with a final agreement for the import of up to a billion cu ft of gas a day expected to be signed in 2009.
The two countries are well-advanced in the negotiation process, having signed a framework agreement in October 2008. It could be four years before a pipeline is completed, but the additional one billion cu ft will almost double the gas available to Bahrain, given the country currently produces 1.2 billion cu ft a day.
Elsewhere in the sector, Noga Holding – the holding company set up to invest the government’s oil revenues in high-value projects – announced in 2008 it will take a 55 per cent stake in a new joint-venture company with Finnish firm Neste Oil formed to build a $400 million lube oil plant in Bahrain.
Given the fact that this development follows so soon on the heels of a highly successful $1 billion upgrade of the country’s Bapco refinery including the creation of a low-sulphur diesel plant (LSDP) whose low-emission products have opened a host of new markets to Bahrain, it is clear that under the guidance of Noga, Bahrain can finally begin to view the future with confidence, as well as its past with pride.