April 1st: Imagine the newspaper headline in block letters; ‘BAHRAIN DISCOVERS 80 BILLION BARRELS OF OIL’. Well, it wasn’t headlines news all over the world until later that day when the likes of Bloomberg confirmed it. (And not the Bahrain element of Bloomberg or the on-line portal – they are way behind). Back on planet earth, not only in Bahrain, but half the world thought it was a corny well used April Fool’s joke and it went viral! Right up until the official press conference April 4th, many were still not sure.
Well what do you expect on April 1st with the announcement that one of the smallest counties in the world has discovered oil and gas to match the reserves of one of the biggest countries in the world – Russia; 80 billion barrels. There was plenty of gas found too, deep though it maybe, but 10-20 trillion cubic feet is reckoned to be hissing away ready to be harvested. As Bahrain’s Oil Minister Sheikh Mohammed said when asked if it was big enough; ‘Plenty for us’.
‘Bahrain Discovers 80 Million Barrels of Oil’ oh yes! Plus a lot of gas and the governemnt has been looking for this for a long time and guessed the oil was there somewhere, along with the gas. Why the wait? Well, the Government obviously now feel that the confidence is there to announce the good fortune.
Over the past few months, there has suddenly been a lot of ‘infrastructure improvement’ announcements. New bridges and underpasses, desperately needed as traffic is abysmal everywhere on the island. They have all been planned for years but no money honey to build. Most just roll their eyes content in the knowledge that Bahrain, unlike Dubai cannot afford such lavish networks of roads and rail. A clue might be in that a second bridge to Saudi Arabia was announced and finalized a year or two back and that will cost mega bucks. ‘Wadda you know’, days before the oil find, more projects are given the go ahead. Someone is very confident.
Will there be another gold rush in Bahrain, with property prices going through the roof? THEY ALREADY ARE! Will millions more expatriates zoom in, as what happened in Qatar, now one of the most expensive countries on the globe. Previous to the giant gas discovery, much of the world had never heard of Qatar. It was a sleepy old town surrounded by 11,571 km² of sand squashed out like a pimple from Saudi Arabia. For so many years, it was much like Bahrain was in the 70s, albeit bigger. The population was just a couple hundred thousand, but as of 2017, The World Bank reckon it to be upwards of 3 million. 2.5 million of those are expatriates. Along with that grew the arrogance, making Qataris the least popular in the Gulf. As of this writing, Qatar is isolated within the GCC, but with so much money, it is not such a big worry for them one assumes. As for Bahraini, well that is a different mindset altogether. Bahrain is used to expatriates and always has been. The integration is phenomenal and such little animosity as to be insignificant, except for never ending schemes to extract more money out of them.
Buildings, money, workers and so on, you cannot buy sophistication and still Qatar, as with Bahrain, the media is as pathetic and closed up more so now than it was in the ‘free’ 80s. It is the standard of a country’s media by which it’s sophistication level is measured. Broadcast is still the pathetic pits in both countries and that will never change. It cannot now, since everything is on-line and there is not an ounce of competence, creativity or perception within the management, nay authorities to wrestle back an audience. Again, maybe someone had that vision 20 years ago so thought’; why bother broadcast – will lose out to on-line so why waste money. Will lots of money buy a little more sophistication? In Bahrain…. yes! But imported.
Property prices in Bahrain are not exactly bad by comparison if one wants to buy, but they are well up and a tad over valued but that is just normal greed and hopefulness. Still it is not as expensive as the UK. It is rental property that is pure extortion. Don’t even think about Qatar now, as their wealth bought pure Beverly Hills rates for a maisonette if you can find one. In Bahrain it is not quite as bad, but still Exorbitant prices with landlords hoping to fish the Americans who have big budgets. Swathes of property both residential and business lay empty. Glittering ghostly high-rise in the sun (as in Dubai in parts) and business played up to justify it all and extort the rents. Shout in the luxurious lobbies and your voice echoes up 52 floors because there is nobody in them. Why did wealthy Bahrainis keep on building and building and building when there isn’t the people to fill them nor the money to afford the rents. Did someone know something a few years back when all this started? Whatever the reason, the announcement has been held back. If that is the case, then it shows immense savvy.
Bahrain has been going through a very hard time since 2011, in fact prior to that with the ‘Credit Crunch’. A lot of play acting at being financially attractive. If there was prior knowledge of this discovery, then imagine the players, chomping at the bit, knowing the secret but couldn’t say anything. Well they can now and Sheikh Mohammed bin Khalifa Al Khalifa the Minister of Oil in Bahrain is rather coy and relaxed about the whole affair, while half the population looks on in awe desperately hoping for the big windfall pay out. Asking the Sheikh if Bahrain was going to see an influx of expatriates and oil people, he smiled and said; ‘Don’t count your chickens’.
So, Qatar went absolutely hard core modernization in a very short time, spending trillions of dollars before they’d even mined it on infrastructure; Bahrain already has modernized with some stunning properties about the Island. So, within weeks will we hear of new lavish road networks being built and a reduction in the already world record ‘electricity charges’? What was that about chickens?
Still the oil and gas has to come out of the ground and Sheikh Mohammed is optimistic that within 5 years it will flow, with the gas well and truly flowing long before that because it is easier to get at. For the oil, it has to be extracted by horizontal drilling and fracking. World wide objection to fracking is growing, but here in Bahrain, there will probably be no rumbles….. literally. Iran is on a fault line and the activists maintain that fracking can cause seismic activity. That might be so in the middle of Dorset in Southern England, but in the Middle East where the oil bubbles to the surface, the disturbance is unlikely to be more than an A380 having a heavy landing at the airport. Besides, Iran’s testy bits are over 300 kilometers away from where the oil has been discovered.
This new discovery could be producing 200,000 barrels a day with 500 to 1,000 wells being drilled. All this depends on the cost effectiveness of course, but Tatweer Petroleum and Bahrain Petroleum are addressing this. Finally, we asked Tatweer Petroleum’s CEO, James Eastlack why, if we knew the oil was there already, has it taken so long to discover. His answer was quite euphoric from his point of view it seemed, as he pointed out that American Technology has progressed aggressively especially in ‘fracking techniques’