Bahrain To Sign Oil Deal With US Occidental By The End of 2009

"We are still negotiating," Abdul-Hussein Mirza, state's top energy official, told Reuters by telephone. "If it all goes well we will sign the agreement before the end of 2009."

The contract would give Occidental a share of production if it manages to boost output from the field above a target figure, Mirza said. He declined to say more as details were still being negotiated.

Mirza said last month that Occidental was ahead of the other bidders for the project, Exxon Mobil and A.P Moller-Maersk.

Occidental says it will use enhanced oil recovery techniques to boost crude output from the 35,000 bpd field. Bahrain targets doubling oil output and also raising gas production at Awali.

The field was discovered in 1932, the first oil find on the Arab side of the Gulf, heralding the later discovery of the world's largest oil reserves in neighbouring Saudi Arabia.

Bahrain is a small oil producer. Aside from Awali output, it receives about 150,000 bpd of crude from Saudi Arabia, its share of output from the Abu Saafa oil field.

Last year, Bahrain awarded a tender for offshore exploration to Occidental and Thailand's PTT Exploration and Production.

Author: Ksenia Kochneva