Identifier
Created
Classification
Origin
09MANAMA162
2009-03-18 13:12:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Manama
Cable title:
OCCIDENTAL TO ENHANCE PRODUCTION IN BAHRAIN'S
how-toVZCZCXRO2767 PP RUEHDE RUEHDH RUEHDIR DE RUEHMK #0162 0771312 ZNR UUUUU ZZH P 181312Z MAR 09 ZDK FM AMEMBASSY MANAMA TO RUEHC/SECSTATE WASHDC PRIORITY 8548 INFO RUEHZM/GULF COOPERATION COUNCIL COLLECTIVE PRIORITY RUEHTRO/AMEMBASSY TRIPOLI PRIORITY 0016 RUEHAD/AMEMBASSY ABU DHABI PRIORITY 1792 RHBVAKS/COMUSNAVCENT PRIORITY RHMFIUU/HQ USCENTCOM MACDILL AFB FL PRIORITY
UNCLAS MANAMA 000162
SIPDIS
SENSITIVE
BAGHDAD FOR AMBASSADOR ERELI
E.O. 12958: N/A
TAGS: ECON EPET AE BA
SUBJECT: OCCIDENTAL TO ENHANCE PRODUCTION IN BAHRAIN'S
AWALI FIELD
REF: A. MANAMA 58
B. 08 MANAMA 715
C. 08 MANAMA 702
UNCLAS MANAMA 000162
SIPDIS
SENSITIVE
BAGHDAD FOR AMBASSADOR ERELI
E.O. 12958: N/A
TAGS: ECON EPET AE BA
SUBJECT: OCCIDENTAL TO ENHANCE PRODUCTION IN BAHRAIN'S
AWALI FIELD
REF: A. MANAMA 58
B. 08 MANAMA 715
C. 08 MANAMA 702
1. (SBU) Summary: Bahrain and Occidental Petroleum (Oxy)
have reached an interim agreement to enhance production of
the onshore Awali field. The final commercial agreement
should be complete by the end of April, and Oxy hopes to
begin ramping up operations in Bahrain by year's end. The
initial investment will be worth at least USD 1.5 billion,
and could grow to as much as USD 5 billion. Both Bahrain and
Oxy are confident that they will be able to more than double
Bahrain's current oil production, and significantly increase
its natural gas production. End Summary.
2. (SBU) On March 15, Bahrain's Minster of Oil and Gas and
Chairman of its National Oil and Gas Authority (NOGA),Dr.
Abdul Hussein bin Ali Mirza announced that an interim
agreement had been reached between NOGA, Oxy, and Abu Dhabi's
Mubadala Development Company to enhance the oil production of
Bahrain's Awali field. Oxy VP for Government Relations
Daeman Harris (please protect) told Econoff on March 16 that
the interim agreement laid out the framework for creating a
joint venture company between the three parties, but that
final commercial terms had not yet been agreed. Harris said
that negotiations were continuing and he anticipated that an
agreement on the commercial terms would be signed before the
end of April. The final agreement will have to be ratified
by Parliament prior to being signed into law by the King.
3. (SBU) Harris said that Mubadala will participate in the
joint venture operationally and as an equity partner. (Note:
Mubadala has an existing oil and gas division that has active
investments in similar field enhancement projects in Oman and
Libya. End note.) Harris said the initial investment in
Bahrain would total USD 1.5 billion within the first five
years, and over the next 20 years that number would likely
grow to at least USD 5 billion -- making it the largest U.S.
investment in Bahrain ever. Both Oxy and NOGA officials are
confident that the field enhancement project will double the
current output of 32-35,000 bbl/day, and could easily exceed
100,000 bbl/day. Both parties are also hopeful that the
project will significantly increase the production of natural
gas associated with the field, which may be of even greater
interest to the Bahrainis, who remain in negotiations with
Iran to purchase natural gas (refs A, B, C).
4. (SBU) Once the final agreement is signed into law, Oxy
will move to begin operations, aiming to establish the joint
venture company infrastructure by the end of the year.
According to Harris, Oxy has already entered negotiations for
land and the construction of a local headquarters. While he
anticipates that the majority of the joint-venture staff will
be Bahraini (80-90%),Oxy plans to eventually move 20-40
personnel to Bahrain.
********************************************* ********
Visit Embassy Manama's Classified Website:
http://www.state.sgov.gov/p/nea/manama/
********************************************* ********
HENZEL
SIPDIS
SENSITIVE
BAGHDAD FOR AMBASSADOR ERELI
E.O. 12958: N/A
TAGS: ECON EPET AE BA
SUBJECT: OCCIDENTAL TO ENHANCE PRODUCTION IN BAHRAIN'S
AWALI FIELD
REF: A. MANAMA 58
B. 08 MANAMA 715
C. 08 MANAMA 702
1. (SBU) Summary: Bahrain and Occidental Petroleum (Oxy)
have reached an interim agreement to enhance production of
the onshore Awali field. The final commercial agreement
should be complete by the end of April, and Oxy hopes to
begin ramping up operations in Bahrain by year's end. The
initial investment will be worth at least USD 1.5 billion,
and could grow to as much as USD 5 billion. Both Bahrain and
Oxy are confident that they will be able to more than double
Bahrain's current oil production, and significantly increase
its natural gas production. End Summary.
2. (SBU) On March 15, Bahrain's Minster of Oil and Gas and
Chairman of its National Oil and Gas Authority (NOGA),Dr.
Abdul Hussein bin Ali Mirza announced that an interim
agreement had been reached between NOGA, Oxy, and Abu Dhabi's
Mubadala Development Company to enhance the oil production of
Bahrain's Awali field. Oxy VP for Government Relations
Daeman Harris (please protect) told Econoff on March 16 that
the interim agreement laid out the framework for creating a
joint venture company between the three parties, but that
final commercial terms had not yet been agreed. Harris said
that negotiations were continuing and he anticipated that an
agreement on the commercial terms would be signed before the
end of April. The final agreement will have to be ratified
by Parliament prior to being signed into law by the King.
3. (SBU) Harris said that Mubadala will participate in the
joint venture operationally and as an equity partner. (Note:
Mubadala has an existing oil and gas division that has active
investments in similar field enhancement projects in Oman and
Libya. End note.) Harris said the initial investment in
Bahrain would total USD 1.5 billion within the first five
years, and over the next 20 years that number would likely
grow to at least USD 5 billion -- making it the largest U.S.
investment in Bahrain ever. Both Oxy and NOGA officials are
confident that the field enhancement project will double the
current output of 32-35,000 bbl/day, and could easily exceed
100,000 bbl/day. Both parties are also hopeful that the
project will significantly increase the production of natural
gas associated with the field, which may be of even greater
interest to the Bahrainis, who remain in negotiations with
Iran to purchase natural gas (refs A, B, C).
4. (SBU) Once the final agreement is signed into law, Oxy
will move to begin operations, aiming to establish the joint
venture company infrastructure by the end of the year.
According to Harris, Oxy has already entered negotiations for
land and the construction of a local headquarters. While he
anticipates that the majority of the joint-venture staff will
be Bahraini (80-90%),Oxy plans to eventually move 20-40
personnel to Bahrain.
********************************************* ********
Visit Embassy Manama's Classified Website:
http://www.state.sgov.gov/p/nea/manama/
********************************************* ********
HENZEL