Bahrain is set to allow foreign companies to own 100 percent of oil and natural gas extraction projects following an order issued by Prime Minister Sheikh Khalifa bin Salman al Khalifa.
Bahrain News Agency reported that to be eligible, the foreign parent company must have signed, or be in the final stages of signing, an exploration and production agreement with the government.
The move comes days after a report suggested Bahrain expects to fall short of some of the goals it set as part of a fiscal adjustment programme tied to a $10 billion economic aid package from some of its GCC allies.
According to a final draft of its state budget for the next two years, non-oil revenues and government expenditures will fall short of previous forecasts.
The aid package pledged by Saudi Arabia, the UAE and Kuwait was linked to a number of reforms designed to eliminate the Gulf kingdom’s budget deficit.
Earlier in May, Bahrain revised its budget, indicating that it may take longer than expected to balance the country’s budget.
In a statement to Reuters, a finance ministry spokesperson said that Bahrain’s deficit reduction programme was ahead of schedule, with the budget having been reduced to 6.2 percent of GDP compared with a projected 9.8 percent.
According to International Monetary Fund forecasts, Bahrain’s oil revenues will constitute 5.4 percent of GDP in 2019 and 5.7 percent in 2020, falling short of the 6.2 and 6.6 percent outlined in the fiscal adjustment programme.
Additionally, state spending is still expected to account for 24 percent of GDP in 2019 and 23.1 percent in 2020, compared to previous targets of 22.6 and 21.6 percent. Without the fiscal reform programme, state expenditure would have accounted for 25.5 and 25.2 percent of GDP in 2019 and 2020, respectively.For all the latest energy and oil news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
Subscribe to Arabian Business' newsletter to receive the latest breaking news and business stories in Dubai,the UAE and the GCC straight to your inbox.