All of Bahrain's 125 million barrels of onshore proven oil reserves are located in the Awali field, the first oil field to be developed in the Persian Gulf. Discovered in 1932, Awali's crude oil production peaked at more than 75,000 barrels per day (bbl/d) in the 1970s, but has declined since then. Bahrain’s oil sector accounts for in the region of two-thirds of total government revenue.
The oil reserves offshore in the Gulf of Bahrain became available for exploration and potential exploitation following the International Court of Justice's March 2001 resolution of a territorial dispute between Bahrain and Qatar over islands located between the two countries. The court awarded sovereignty over the Hawar Islands to Bahrain, allowing Qatar to retain the neighbouring islands of Zubarah and Janan. Bahrain has since offered concessions to foreign investors. In November 2001, Bahrain awarded two blocks off the country's southeastern coast to Petronas (Malaysia) and another similarly located block to ChevronTexaco.
Consolidation of Bahrain's state-owned petroleum sector began in January 2000, when 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 2005, the Bahrain government issued a royal decree establishing the National Oil and Gas Authority (NOGA), which replaced the Ministry of Oil. NOGA has regulatory and oversight authority, as well as policymaking functions over the oil sector.
Unlike other Gulf states, Bahrain exports refined petroleum products rather than crude oil, with most of Bahrain’s exports going to India and other Asian markets.
Bahrain has modest natural gas reserves, and according to the 2008 BP Statistical Energy Survey, had 2007 natural gas production of 11.5 billion cubic metres, 0.39% of the world total.
