Boston, MA -- (SBWIRE) -- 09/07/2012 -- BMI View: Bahrain has a far smaller oil and gas resource base than its neighbours, but is a leading regional refined products exporter. In the coming decade, the country may begin importing LNG, but will also boost both oil and gas production. The country will continue to enjoy revenues from the Abu Saafa field, which is shared with Saudi Arabia, but will also continue importing Saudi crude oil to feed the Sitra refinery, which may be expanded. Despite the political unrest in 2011, Bahrain has not fallen in our riskreward ratings as the country remains open to foreign investment.

We highlight these trends and developments in Bahrain's oil and gas sector:

- BMI sees Bahraini oil production rising to as much as 95,000 barrels per day (b/d) by 2021, in line with efforts to boost output at the mature Bahrain field. We expect oil consumption to grow to almost 60,000b/d.
- We expect both oil and gas reserves to decline in the period 2012-2021, pending new discoveries. Oil reserves are expected to fall to 112mn barrels (bbl) by 2021, with gas reserves falling to around 80bn cubic metres (bcm).
- Gas production and consumption are likely to grow in tandem to just around 19.5bcm by 2021.
- Risks to our forecasts include final approval for the expansion of the Sitra refinery, enlargement of the Saudi import pipeline, as well as for a proposed LNG import terminal to feed growing gas demand.
- State-run firms Bahrain Petroleum (BAPCO) and Saudi Aramco are considering a scheme to replace, upgrade and redirect a pipeline that links Saudi oil fields to Bahrain's only refinery. The project is expected to increase the capacity of the pipeline to 350,000b/d. The two countries are expected to finish the front-end engineering and design, or FEED, by the end of 2012, and open the tender in 2013. The estimated cost is around US$350mn.
- BAPCO is planning a major overhaul and expansion of its refinery at Sitra, with the aim of adding some 100,000b/d of capacity and additional petrochemicals production. This is a scaling back of the original plan to hike production to 500,000b/d, but given the paralysis that has afflicted the kingdom since the outbreak of protests in Q111, the decision to move ahead is welcome. The project is expected to cost US$6.5bn and will take 18 months to complete.

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