Bahrain Country Commercial Guide
Learn about the market conditions, opportunities, regulations, and business conditions in bahrain, prepared by at U.S. Embassies worldwide by Commerce Department, State Department and other U.S. agencies’ professionals
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Oil and Gas
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Overview

Despite progress toward greater economic diversification, Bahrain’s oil and gas sector remains the main driver of the country’s economy. As a small non-OPEC Gulf oil producer with approximately 125 million barrels of proven reserves, Bahrain receives its oil revenues from two fields: the onshore Bahrain field and the offshore Abu Safah field, which it shares with Saudi Arabia. In April 2018, the Bahraini government announced its biggest oil and gas discovery since the 1930s. The extensive reservoir discovered off Bahrain’s west coast is estimated to contain approximately 80 billion barrels of tight oil. Bahrain also announced the discovery of 10-20 trillion cubic feet of onshore “Pre-Unayzah” deep natural gas reserves beneath the legacy Bahrain field; forensic work on this find continues.

Leading Sub-sectors

With revenues from oil exports accounting for over 50 percent of government income in recent years, the Bahraini government is seeking to diversify the economy and income sources from other sectors. Targeted areas for manufacturing include plastics, fiberglass, chemicals, petrochemicals, and food processing. The Bahraini government has also emphasized the development of its the petrochemical industry, namely construction chemicals, water treatment chemicals, polymer and plastic additives, paints and coating additives, and oil field chemicals.

Opportunities

After a series of 2021 reforms restructuring the oil and gas sector, including consolidating the National Oil and Gas Authority into the Ministry of Oil and Environment, the Government of Bahrain released a National Energy Strategy in 2023 that outlined changes to oil and gas state-owned enterprises and highlighted strategic priorities in the energy sector.

With a concentrated industrial footprint and abundance of spent oil and gas reservoirs, Bahrain is actively exploring Carbon Capture and Storage (CCS) technology to deploy across its oil and gas and industrial sectors.

Efforts to delineate and de-risk the Khaleej Al-Bahrain (KAB) find and the Pre-Unayzah deep gas reservoir are ongoing, providing opportunities for international oil companies (IOCs) and oil field services companies. Bahrain engaged a U.S. firm to drill offshore appraisal wells to evaluate the commercial viability of the KAB and maintains an MOU with another U.S. company to serve as a knowledge partner. The government has invited companies to formally register their interest to gain access to the find’s virtual data room.

Bahrain is carrying out a $7 billion upgrade of the Bapco Refining, a subsidiary of state-owned Bapco Energies, by leveraging $482 million in U.S. goods and services. Initially slated to be completed in 2022, the project is nearing completion with gradual commissioning expected before the end of 2025. The expansion will boost Bapco’s processing capacity to 400,000 barrels per day (bpd) from 267,000 bpd once finalized and improve energy efficiency and emissions. In August 2021, Bapco awarded a U.S. joint venture a $250 million catalyst management contract in connection to the modernization project.

Bahrain LNG, jointly owned by Bapco Energies and a consortium consisting of Teekay LNG Partners, Gulf Investment Corporation (GIC), and Samsung C&T (Samsung), operates Bahrain Hidd Floating LNG Terminal near Khalifa Bin Salman Port. Commissioned in February 2020, the terminal started operations in 2025 as Bahrain began importing LNG. The project has a capacity of 800 million standard cubic feet per day. Bahrain is actively increasing its LNG imports to address declining domestic gas production and ensure energy security, with plans for long-term supply agreements and regular usage of its LNG terminal. Bapco is also exploring long-term supply deals, presenting opportunities for U.S. IOCs.

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