The future for heavy oil has come and now is the time for the Middle East to grasp this opportunity, said Bahrain Oil and Gas Affairs Minister and National Oil and Gas Authority chairman Dr Abdulhussain Mirza.

'The Middle East is estimated to have in place 1,000 billion barrels of heavy oil which is equivalent to 28 per cent of the estimated world total reserves,' said Dr Mirza in his keynote address at the opening session of the Heavy Oil World Mena 2010 conference at the Gulf Hotel yesterday.

'Despite this immense resource base, heavy oil and natural bitumen accounted for only 3 billion of the 25 billion barrels of crude oil produced by the beginning of this millennium.

'The vast reserve demonstrates the importance of heavy oil as a future energy source, one that cannot be overlooked and, therefore, companies that position themselves early in the heavy oil business are likely to win the game,' he added.

He said heavy oil was expensive to produce with Canadian production in Alberta estimated to only breakeven at $35.

However he believed that in Bahrain heavy oil could be retrieved at between $8 and $9.

'Heavy oil will be a saviour to the ever-increasing demand for fossil fuels from the developing nations,' he said.

'My view is that 2008 was a turning point. Crude oil rose to the lofty price of $147 a barrel and then dropped to a low of $34.

'Since then it has returned to today's price of around $70. I believe this signalled that the global economy can support a price in the $70 to $80 range even in times of recession.

'It is significant because at this price range the heavy oils and shale oils can become an economic reality.

'We now have a confluence of a crude oil price which will support exploration and production of heavy crude oil, an ever-increasing demand for the product and a global economy accepting that the true vale of crude oil in the future will be much higher than has been enjoyed in the past,' he said.

'To overcome the challenges in successfully bringing out the heavy oil we need partnerships among national oil companies, international oil companies and service companies,' he added.

'They must find ways to reach meaningful and mutually beneficial alliances.

'As development efforts focus on extracting resources in increasingly challenging areas and difficult reservoirs, the ability to forge strong partnerships leveraging on respective strengths will be essential to the successful development of such resources,' he said.-TradeArabia News Service