Bahrain celebrates biggest oil discovery since 1932

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Extracted crude oil pours from a pipe in the village of Wonocolo, East Java, Indonesia, on Tuesday, Aug. 9, 2016. Southeast Asia's largest economy has expanded by about 5 percent for the past 10 quarters, struggling to pick up toward President Joko Widodo's 7 percent target. Photographer: Dimas Ardian/Bloomberg

Bahrain, the smallest energy producer in the Persian Gulf, discovered its biggest oil field since it started producing crude in 1932, according to the country’s official news agency.

The shale oil and natural gas discovered in a deposit off the island state’s west coast “is understood to dwarf Bahrain’s current reserves,” Bahrain News Agency reported, without giving figures. The country currently pumps about 45,000 barrels of oil a day from its Bahrain Field, and it shares income from a deposit with Saudi Arabia that produces about 300,000 barrels a day, according to figures from the U.S. Energy Information Administration.

Bahrain discovered the offshore Khaleej Al Bahrain Basin as it seeks to expand output capacity at its wholly owned Bahrain Field to 100,000 barrels a day by the end of the decade. The island kingdom is now bound by the global agreement among major oil producers to limit production to reduce global inventories.

“Initial analysis demonstrates the find is at substantial levels, capable of supporting the long-term extraction of tight oil and deep gas,” Bahrain Oil Minister Shaikh Mohammed bin Khalifa Al Khalifa said in the BNA report.

Brent crude rose 0.5 percent to $69.68 a barrel on the London-based ICE Futures Europe exchange at 9:33 a.m. in Dubai on signs that U.S. producers have curtailed drilling activity.

Consultants DeGolyer & MacNaughton Corp. evaluated the field, and Bahrain plans to provide additional details on Wednesday about the reservoir’s “size and extraction viability,” according to BNA.

Bahrain last week reined in plans to sell bonds as investors sought higher yields. After indicating it could sell a mix of conventional and Islamic debt with as many as three different maturities, it only offered 7.5-year sukuk, raising $1 billion on March 28.

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