Bahrain is yet to decide on whether it would spend $5 billion (Dh18.36 billion) to upgrade its oil refinery – a move that would increase capacity from the current 260,000 barrels per day (bpd) to 360,000 bpd.
According to Abdul Hussain Mirza, Bahrain’s Minister of Energy, a project management contractor, Worley Parsons, has already been appointed and the government is awaiting feedback before making a decision on the upgrade.
“We have done the Feed (Front End Engineering Design) and it is being done by Technip, and should be ready by the end of the first quarter this year.
We have appointed the project management contractor, and they will be working on this and they will send us detailed feedback and a decision will be made on how to proceed further. That means we have gone a long way on the preparation,” he told reporters.
Mirza added that falling oil prices have led to a reduction in costs so it was a good time to proceed with the project.
The Minister was speaking on the sidelines of the World Future Energy Summit, which is currently being held in Abu Dhabi and runs until January 21.
Asked about the impact he expected on oil prices as Iran raises its supply following the lifting of sanctions by the US, Mirza said, “If Iran adds 500,000 barrels, this will contribute to increasing supply over demand.
It depends on when they bring new production online because new production takes time and their plan is to add 500,000 barrels in phase one and then raise that to one million.”
Mirza also discussed the impact of lower oil prices, which reached new lows below $30 a barrel this month, on Bahrain saying that the country was looking at cutting costs and was reviewing subsidies.
“We are looking at all types of subsidies, which is the same thing all the Gulf States are doing. Bahrain is already impacted by the reduction in oil prices because 86 per cent of the government revenues are from oil and gas, so when [prices] go down by 70 per cent, it means all the Gulf states are affected,” he said.
Last week, Bahrain announced it will hike petrol prices by over 50 per cent after cutting subsidies for diesel and kerosene.
Bahrain currently produces 200,000 barrels of oil per day.