It will be subject to a 30 consecutive day oil flow under a partnership deal between Tatweer Petroleum and Italian firm Eni Bahrain to seek deposits in an area known as “offshore block one”, which measures 2,800 square kilometres.

Bahrain will receive an initial $2 million as production starts at a newly discovered oil and gas field off the northern coast.

The GDN previously reported that the major offshore oil and gas exploration project off Bahrain’s north coast is due to start in the first quarter of next year.

MPs last month approved a Royal decree authorising the National Oil and Gas Authority (Noga) to sign an agreement for oil exploration and production.

His Majesty King Hamad issued the decree during the National Assembly’s recess.

Under the deal, which should also see oil flow for 30 consecutive days, Noga will get $1.5m for the production of 10,000 barrels a day, $3m for 40,000 barrels a day and $6m for 70,000 barrels a day as regular production.

Approved

Details of the deal were revealed yesterday during Shura Council’s weekly session, where all members present approved the Royal decree.

“All oil and gas that would be discovered is the property of Bahrain whether in the first three years of excavation, or the second four-year period, or even the 25-year period when the actual regular production begins,” said Shura’s financial and economic affairs committee acting chairman Redha Faraj.

“Eni will shoulder all costs throughout this period, while shares will be divided according to an r-factor equation that sees the production cost removed and Bahrain getting profits accordingly.

“First production will see Noga receive $2m and then when regular production starts up to $6m a day for 70,000 barrels.

“Bahrain’s profits could increase to 80pc from whatever is extracted, with a 46pc oil and gas income taxation being imposed on Eni’s operations.”

The committee’s secretary Bassam Albinmohammed said Bahrain also has an option to buy an additional 10pc of the daily production.

“All operations will be done using clean technologies under Eni’s commitments in the deal, with Bahrain benefiting from all aspects whether regular production or even the additional 10pc if it opts for it,” he said.

They were speaking after sitting in on a presentation with Oil Minister Shaikh Mohammed bin Khalifa Al Khalifa, who was excused from attending yesterday’s session due to other official commitments.

Meanwhile, Tatweer Petroleum exploration and development general manager Yahya Al Ansari, who was present at the meeting, said the deal obliges Eni to abide by the country’s rules and regulations, including the Labour and Social Development Ministry’s employment and Bahrainisation requirements.

“Eni will train Bahrainis to handle the site in excavation and production under several deals that sees them abide by the country’s rules and regulations, including the Labour and Social Development Ministry’s employment and Bahrainisation requirements,” he said.

“During the two-year study phase before the agreement was signed we had a team from our side follow up everything in specifics, so that we were made aware of the site and what was going on.

“We are also in direct contact with the Supreme Council for Environment to ensure the Eni doesn’t breach environmental aspects.”

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