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Published on January 19, 2008

The move has been hailed in the country as a major achievement for democracy.

The Gulf Daily News this week reported Bahrain's parliament unanimously approved the two tenders for exploration of oil and gas off of Bahrain's shores. This is the first time in the history of the country that a strategic tender is being awarded by the Tender Board for the exploration of oil, said Oil and Gas Affairs Minister and Tender Board chairman Abdulhussain Mirza.

The daily quoted sources as saying that under the revenue sharing formula, Occidental would receive 18 per cent before tax and PTTEP 25 per cent.

The exploration period will be seven years. Selected companies will carry out geological and geophysical studies in the first year. The following three years will constitute the first exploration phase, which will include seismic surveys and drilling of wells.

The second phase will be held during the last three years.

The waters off of Bahrain have been divided into four blocks for exploration purposes.

Occidental will carry out exploration in blocks three and four in the southeast, while PTTEP will do its work in block two in the northwest.

There were no bidders for block one.

"Exploration of oil is an important matter affecting our future generation," Mirza told the newspaper. "I, therefore, consider the day the tenders were approved by parliament a historic day."

Mirza said the matter would now be discussed by the Shura Council before the government sealed the deal.

"We expect the Shura Council to take it up in its next session by the end of the month," he said. "In preparation, we have briefed its finance committee about the tenders. The fact that the tenders won the unanimous approval of parliament is a major achievement for democracy in Bahrain."

Mirza said eight bids had been received for the Bahraini onshore field development. "This is aimed at increasing the current production. We shall shortlist the bidders by the end of next month," he said.

The companies selected for offshore exploration will spend their own money for the survey and exploration.

"If they do not find oil, they will bear all the costs involved, but if oil is found, there is a profit-sharing formula," he added.

The Nation