Bahrain may transfer some of its oil and natural gas assets into a proposed state-run fund in which it could sell shares to investors, as the smallest Gulf Arab country seeks to balance its budget.
The government is working on the project and may decide to proceed with it later this year, Oil Minister Mohammed bin Khalifa Al Khalifa said in an interview. It’s still deciding which assets to put into the proposed fund and how to value them, he said.
After Saudi Arabia sold a stake in national oil company Saudi Aramco last year, “nothing is not for sale anymore,” Al Khalifa said.
A slump in crude prices since 2014 has prodded oil-rich states in the Persian Gulf to take unprecedented steps to open up to foreign investors to try to boost state coffers. Neighboring Saudi Arabia raised nearly $30 billion from the initial public offering of Aramco in December, while Abu Dhabi National Oil Co. has raised funds by bringing in partners for its refining unit and drilling business.
Bahrain, where oil and gas are also central to the economy, wants to balance its budget by 2022. Its deficit ballooned to 13% of gross domestic product in 2015, though it has improved, narrowing in 2019 to 4.7% of economic output from 6.3% a year earlier, the Finance Ministry said last month.
The proposed fund and the sale of a stake in it would serve as “a channel for private investors to come in, which they haven’t really done in the oil and gas sector in Bahrain,” Al Khalifa said.
Meanwhile, Bahrain has postponed two oil and gas conferences which were scheduled to take place this month, including a regional gathering for oil traders, due to the coronavirus outbreak.
The annual Middle East Petroleum and Gas Conference (MPGC), at which the region’s oil traders meet, has been postponed to the second half of the year due to travel restrictions and health concerns, the organisers said on Monday.
Another energy conference, GEO 2020, which was due to be held on March 16-19, was postponed until Sept. 14-17. Gulf oil ministers and senior oil officials were due to speak at both conferences.
Bahrain has reported 47 cases of the coronavirus infection. Airlines have been suspending flights or modifying services in response to the coronavirus outbreak, as more cases were reported around the globe.
Concerns also prompted organisers to cancel one of highest-profile gatherings of oil ministers and top executives from the energy and financial industries scheduled this month in Houston.