Calls for Heavy Oil Production Could Help FDMF

Bahrain Calls for Increased Heavy Oil Production
Last Updated: June 11, 2010 - 8:45am EST

(New York)--Bahrain's oil minister, Abdulhussain Mirza, told the Heavy Oil World MENA conference on Thursday that Middle East countries should increase production of heavy oil as oil prices remain higher and improved technology makes it easier.

Mr. Mirza commented that heavy oil reserves in the region were estimated at 1 trillion barrels, or 28 percent of total world reserves, but historically accounted for little more than 10 percent of production. "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," Mirza said, according to local news reports.

Heavy crude oil is distinguished from light crude oil because it does not flow as easily due to a higher specific gravity. Oil sands and natural bitumen, which don't flow at all, are also included in this definition.

Using advanced oil recovery technology and developing the heavy oil sectors of the Awali field in Bahrain could double or triple its production from 32,000 barrels a day currently, Mirza said.

One of the smaller-cap oil technology companies working in the heavy oil recovery field is Freedom Energy Holdings, Inc (OTC:FDMF), which through its KC9000 technology is effective in freeing oil wells, getting heavy deposits to flow and improving heavy oil to refinery grade, and is currently working on developing several heavy oil projects and joint-ventures in the Middle East, Venezuela, and South Texas. In addition, the Company is also currently in stage 3 studies with BP Plc (NYSE:BP) regarding Gulf oil clean-up efforts, and is expected to meet with Plaquemines Parish officials in Louisiana early next week.

With US offshore production of oil now on hold, many producers may turn their heads towards the more difficult oil sand projects as these news technologies now make it feasible to produce.

Bahrain recently signed an agreement with Mubadala Development, an Abu Dhabi state-owned firm, and Occidental Petroleum (NYSE:OXY) of the US, to boost heavy oil production in the Awali field, one of the oldest in the region and Bahrain's only oilfield. The national oil companies of Bahrain, Kuwait and Saudi Arabia were represented at the Bahrain conference, as well as multinational oil giants Total and Chevron (NYSE:CVX).

"Heavy oil will be a savior to the ever-increasing demand for fossil fuels from the developing nations," Mirza was quoted as saying.