One of the smallest oil producers in the Middle East just announced its biggest discovery in decades
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- The island nation of Bahrain announced Wednesday that it discovered a shale reserve with at least 80 billion barrels of crude oil.
- Like other producers, Bahrain's government relies on oil revenues to fund itself, and its deficit was worsened by the oil crash that began in 2014.
- Halliburton will frack the shale reserve to evaluate how much oil in the find is actually extractable.
Bahrain announced on Wednesday that it discovered at least 80 billion barrels of crude oil in a shale reserve.
The island kingdom to the east of Saudi Arabia is the smallest and oldest energy producer in the Persian Gulf, according to Bloomberg.
Depending on how much is extractable, the discovery could beef up Bahrain's output in the region that includes heavyweights such as the United Arab Emirates and Iran. Like other producers, Bahrain's government relies on oil revenues to fund itself, and its deficit was worsened by the oil collapse that began in 2014.
Bahraini officials expect production from the well to be up and running within five years. The country currently produces about 50,000 barrels of oil per day, AFP reported.
An "agreement has been reached with Halliburton to commence drilling on two further appraisal wells in 2018, to further evaluate reservoir potential, optimize completions, and initiate long-term production," the statement added.
But Halliburton could find that only a fraction of what's underground is recoverable. According to Bloomberg, citing a local newspaper, the new discovery could one day supply 200,000 barrels per day.
Bahrain isn't part of the Organisation of Petroleum Exporting Countries, an oil cartel, but was one of 11 non-members that agreed to cut their oil output to help reduce a global oversupply of oil.