Energy Information Administration
September 2002


Bahrain produces only a modest quantity of oil, but has a strategic location in the Persian Gulf.

Note: The information contained in this report is the best available as of September 2002 and may change.

Bahrain is a constitutional monarchy ruled by King Hamad bin Issa Al-Khalifa, who has been in power since March 1999. Geographically, the country is a group of islands off Saudi Arabia - close enough to be linked by a causeway which connects it to the mainland of the Arabian Peninsula.

Bahrain's economy depends heavily on the oil industry, but the country also is an important regional financial center. Accordingly, oil prices affect Bahrain's economy both directly, as government revenues, and indirectly, due to trade links with oil-rich Persian Gulf countries.  Relatively high oil prices in recent years have bolstered Bahrain's economy. Real gross domestic product (GDP) grew by 4.1% in 2001 and is projected to grow by 2.9% in 2002.

Since taking power, Bahraini King Hamad Al-Khalifa has committed Bahrain to gradual democratic reforms. In February 2002, he approved constitutional amendments that call for the election of a new Bahraini parliament on October 24, 2002. The new bicameral legislature (to be made-up of a lower chamber of elected representatives and an upper house of appointed legislators) will be Bahrain's first legislature since the National Assembly was dissolved in 1975.

Bahrain has proven oil reserves of 125 million barrels, all in one field - Awali. The Awali field was discovered in 1932, and was the first oil field developed in the Persian Gulf. In the early 1970s, crude oil production at Awali peaked at more than 75,000 bbl/d. Currently, however, production at the Awali field is declining. In 2001, Awali produced only 35,000 barrels per day (bbl/d) of crude oil.

Bahrain also has untapped potential oil reserves offshore in the Gulf of Bahrain. In March 2001, the International Court of Justice resolved a territorial dispute between Bahrain and Qatar over islands located between the two countries. Sovereignty over the Hawar Islands was awarded to Bahrain, while Qatar retained the neighboring islands of Zubarah and Janan. Resolution of the territorial dispute allowed Bahrain to offer concessions located off the country's southeastern coast to foreign investors. In November of 2001, two blocks were awarded to Petronas (Malaysia) and one block to ChevronTexaco. Both companies intend to begin exploratory drilling in their concessions in late 2002.

More important than crude oil production, however, is Bahrain's refining industry. The country's only refinery, Sitra, is located south of Manama and has a capacity of 248,900 bbl/d. The Sitra refinery was built in 1936, and has since undergone several modernizations. The Bahrain Petroleum Company (Bapco) has announced a $900 million modernization program that entails the addition of supplemental hydrocracking facilities, which will allow Sitra to produce a wider range of petroleum products including low sulphur diesel and gasoline.

Most of the crude oil processed at the Sitra refinery comes from the Abu Safa field via a subsea pipeline. The Abu Safa field is jointly owned by Saudi Arabia and Bahrain. Bahrain exports most of the Sitra refinery's products to India and the Far East.

Consolidation of Bahrain's state-owned petroleum sector began in January 2000, as the upstream Bahrain National Oil Company (Banoco) began merging into Bapco.  The merger was completed on June 1, 2002. The new entity, the Bahrain Petroleum Company BSC, is charged with the exploration, production, refining, marketing and distribution of Bahraini oil for domestic use and the international market.

In 1999, the Bahraini government granted official approval for the proposed construction of a second 500,000-bbl/d refinery in Bahrain by the Saudi firm Petroma.  While not formally canceled, problems with arranging financing have delayed the project.

Bahrain has natural gas reserves of about 3.2 trillion cubic feet (Tcf), most of which is associated gas from the Awali oil field. Bahrain produced 300 billion cubic feet (Bcf) of natural gas in 2000, all of which was consumed locally. Gas production and processing are the responsibility of the majority state-owned Bahrain National Gas Company (Banagas). Because of Bahrain's growing demand for fuel for electric power generation, the country is expected to become a net natural gas importer in coming years.

In January 2002, Qatar and Bahrain signed a Memorandum of Agreement indicating Bahrain's intentions to purchase natural gas from Qatar's North Field Enhanced Gas Utilization Project. Further negotiations are pending, but the first deliveries of Qatari natural gas are expected by the end of 2002. Preliminary estimates indicate that Bahrain could import as much as 500 million cubic feet per day from Qatar by 2006. Qatar, which is planning to build a pipeline for exporting natural gas to Kuwait, has considered the possibility of connecting a spur line to Bahrain. 

In 2000, Bahrain had an electric generating capacity of 1.0 gigawatt (GW), and produced 5.6 billion kilowatt hours (bkwh) of electricity. Driven by population growth, Bahrain's electric power consumption is growing at an annual rate of around 5%. Bahrain's demand growth, coupled with malfunctions at the country's flagship generation plant, Hidd, have concerned the Ministry of Electricity and Water. In May 2002, the Ministry issued an official appeal to Bahrainis to undertake voluntary electricity conservation measures.

Recent electric generating capacity expansion has centered on the Hidd power project. Phase One, which was built in 1999, added 280 megawatts (MW) of gas-fired generating capacity.  The Phase Two expansion of the Hidd power project, led by Alstom (France), will add another 630 MW of gas fired capacity by 2004. 

Another priority is improving the country's transmission and distribution infrastructure. Contracts totaling about $60 million were awarded to several foreign firms including Alstom, ABB, Fuji Electric, and Marubeni in March 2000 for upgrade work.

While the subject of privatization has been discussed, it is not expected that Bahrain will move toward privatization of its state-owned electric utility in the near future.

Head of State: King Hamad bin Issa al-Khalifa
Independence: August 15, 1971 (from United Kingdom)
Population (2001E): 645,361
Location/Size: Persian Gulf, 240 square miles
Major Cities: Manama (capital)
Languages: Arabic (English widely spoken)
Ethnic Groups: Bahraini Arab 63%, Asian 13%, other Arab 10%, Iranian 8%, other 6%
Religion: Shia Muslim 75%, Sunni Muslim 25%
Defense (8/98): Army (8,500), Navy (1,000), Air Force (1,500)

Currency: Bahraini Dinar
Market Exchange Rate (09/02): 1 Bahraini Dinar = $2.63 US (Fixed)
Nominal Gross Domestic Product (2001E): $8.5 billion
Real GDP Growth Rate (2001E): 4.1% (2002F): 2.9%
Inflation Rate (consumer prices) (2001E): 0.3% (2002F): 2.4%
Current Account Balance (2001E): $569.7 million
Major Export Products: Petroleum products, aluminum, textiles
Main Destinations of Exports: India, Saudi Arabia, United States
Major Import Products: Crude oil, consumer goods, chemicals
Main Origins of Imports: Saudi Arabia, United States, United Kingdom

Minister of Oil: Hamad bin Isa bin al-Khalifa
Proven Oil Reserves (1/1/02E): 125 million barrels
Oil Production (2001E): 43,000 bbl/d (of which 35,000 bbl/d was crude oil)
Oil Consumption (2001E): 28,000 bbl/d
Net Oil Exports (2001E): 15,000 bbl/d
Crude Oil Refining Capacity (1/1/02E): 248,900 bbl/d
Natural Gas Reserves (1/1/02E): 3.2 trillion cubic feet (Tcf)
Natural Gas Production (2000E): 300 billion cubic beet (Bcf)
Natural Gas Consumption (2000E): 303 Bcf
Electric Generation Capacity (2000E): 1.0 gigawatts (GW)
Electricity Production (2000E): 5.6 billion kilkowatt hours (bkwh)

Total Energy Consumption (2000E): 0.37 quadrillion Btu* (0.1% of world total energy consumption)
Energy-Related Carbon Emissions (2000E): 5.73 million metric tons of carbon (0.1% of world carbon emissions)
Per Capita Energy Consumption (2000E): 538.8 million Btu (vs. U.S. value of 352.0 million Btu)
Per Capita Carbon Emissions (2000E): 8.3 metric tons of carbon (vs. U.S. value of 5.6 metric tons of carbon)
Energy Intensity (1999E): 372,894 Btu/ $1995 (vs U.S. value of 11,38 Btu/ $1995)**
Carbon Intensity (1999E): 5.72 metric tons of carbon/thousand $1995 (vs U.S. value of 0.17 metric tons/thousand $1995)**
Sectoral Share of Energy Consumption (1998E): Industrial (67.6%), Transportation (11.8%), Commercial (6.5%), Residential (14.1%)
Sectoral Share of Carbon Emissions (1998E): Industrial (64.9%), Transportation (15.2%), Commercial (6.1%), Residential (13.8%)
Fuel Share of Energy Consumption (2000E): Natural Gas (85.0%), Oil (15.0%)
Fuel Share of Carbon Emissions (2000E): Natural Gas (80%), Oil (20%)
Renewable Energy Consumption (2000E): 0.00 trillion Btu
Status in Climate Change Negotiations: Non-Annex I country under the United Nations Framework Convention on Climate Change (ratified December 28, 1994). Not a signatory to the Kyoto Protocol.
Major Environmental Issues: limited natural fresh water resources are increasing dependence on large-scale desalination facilities.

* The total energy consumption statistic includes petroleum, dry natural gas, coal, net hydro, nuclear, geothermal, solar, wind, wood
and waste electric power. The renewable energy consumption statistic is based on International Energy Agency (IEA) data and
includes hydropower, solar, wind, tide, geothermal, solid biomass and animal products, biomass gas and liquids, industrial and
municipal wastes. Sectoral shares of energy consumption and carbon emissions are also based on IEA data.
**GDP based on EIA International Energy Annual 2000

Organization: Bahrain Petroleum Company BSC; Barhain Natural Gas Company (Banagas)
Major Foreign Oil Company Involvement: Chevron, Texaco, Petronas
Major Ports: Manama
Producing Oil Fields (production - bbl/d)(2000E): Awali (32,289 bbl/d)
Major Refineries (capacity - bbl/d): Sitra (248,900)

Sources for this report include: Bahrain Tribune; CIA World Factbook 2001; Dow Jones News Wire service; DRI-WEFA Middle East Economic Outlook; Economist Intelligence Unit ViewsWire; Gulf News; Hart's Middle East Oil and Gas; Middle East Economic Digest; Oil and Gas Journal; Petroleum Economist; Petroleum Intelligence Weekly; International Market Insight Reports; U.S. Energy Information Administration .

For more information from EIA on Bahrain, please see:
EIA - Country Information on Bahrain

Links to other U.S. government sites:
CIA World Factbook - Bahrain
U.S. Department of Energy Office of Fossil Energy - International section - Bahrain
U.S. State Department Consular Information Sheet - Bahrain
U.S. State Department Country Commercial Guide - Bahrain
U.S. Embassy in Manama, Bahrain

The following links are provided solely as a service to our customers, and therefore should not be construed as advocating or reflecting any position of the Energy Information Administration (EIA) or the United States Government. In addition, EIA does not guarantee the content or accuracy of any information presented in linked sites.

Government of Bahrain
Embassy of Bahrain - Washington, DC
Bahrain National Gas Company (Banagas)
Gulf Daily News, Manama, Bahrain

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File last modified: September 5, 2002


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