MANAMA: Oil Minister Shaikh Mohammed bin Khalifa Al Khalifa has said that the era of cheap oil is over and even traditionally oil-rich countries like Bahrain now need to develop resources like heavy oil, tight oil and unconventional gas.
“If we need to employ technologies like fracking the costs are going to go up and therefore prices have to be at a level that sustains investment,” he said in an interview to CNBC on the sidelines of the 2018 edition of the World Heavy Oil Congress and Exhibition (WHOC) at the Oman Convention and Exhibition Centre.
Shaikh Mohammed joined Oman’s Oil and Gas Minister Dr Mohammed bin Hamad Al Rumhy yesterday to inaugurate the three-day event that is gathering more than 3,000 international industry professionals and experts to discuss the transformation of the heavy oil value chain and the future of the world’s energy mix.
When asked about oil price stability by CNBC, Bahrain’s Oil Minister said the narrative of supply risk is now picking up.
“Under-investment happened when prices crashed and people are now realising that it takes a while for investment to result in higher production and the evidence of that is in the inventories which are way below the five-year average.
“So the tendency of prices to go up is certainly there and the price has to be right for investments,” he said.
According to Shaikh Mohammed, what’s really needed is more investment in both exploration and further development to really bring production and inventories higher.
“People are forecasting a short-term supply challenge and what that does to oil prices is also a factor of demand so ultimately its anybody’s guess.”
Talking about Bahrain, the minister said the government has been focused on proving up resources – referring to the discovery of 80 billion barrels of shale oil and between 10 and 20 trillion cubic feet of deep gas announced this April.
Shaikh Mohammed said, “Within the region, Oman was the first to invest in heavy oil and we have a lot to learn from them. Heavy oil could be in heavy demand, at least in the short term, as a result of implications of the light tight oil phenomenon in North America.”
The ministers along with a high-level delegation from WHOC toured the exhibition, which will run until tomorrow, where regional and international NOCs, IOCs, service and technology providers are showcasing the best technologies, products and services for the heavy oil sector.
Notable exhibitors include Petroleum Development Oman (PDO), Eni SPA, China National Offshore Oil Corporation, Bapco, Kitsnet, Badr EOR, Albpetrol, RGL Reservoir Management, SoluForce, HP Well Screen and Salamander to name but a few.
The panel of speakers includes: Mubadala Petroleum chief executive Dr Bakheet Al Katheeri, Eni chief exploration officer Luca Bertelli, Occidental Oman president and general manager Steve Kelly, PDO technical director Amran Marhubi and GlassPoint Solar CEO Steven Moss.
“Heavy oil is a resource that deserves special attention. We always try to apply the most advanced techniques to increase the amounts of recovery of heavy oil and to do it in the most efficient way possible. Digitalisation can help further improve our industry to become more efficient, lower our unit operating costs, and enhance our safety standards,” said Mr Bertelli.