Bahrain's Oil Industry and Economy

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Questions and Answers

What is one of the advantages of Bahrain in attracting the aluminum industry?

Favorable investment climate (correct)

Proximity to European countries

High labor costs

Limited availability of natural gas

What percentage of ALBA's equity was sold to SABIC in 1979?

30 percent

40 percent

10 percent

20 percent (correct)

Why has the competitiveness of ASRY been limited?

Limited availability of natural gas

Proximity to low-wage competitors

High labor costs (correct)

Lack of strategic location

What was the average number of vessels worked on by ASRY per year between 1979 and late 1981?

110 vessles Signup and view all the answers

What was the basis of OAPEC's positive evaluation of ASRY?

Strategic, long-term developmental, and diversification-from-oil considerations Signup and view all the answers

What is a characteristic of the aluminum industry?

Capital-intensive Signup and view all the answers

What is a challenge facing the aluminum industry?

Sustaining recent price gains Signup and view all the answers

What percentage of ASRY do the five OAPEC countries own?

18.84 percent Signup and view all the answers

What is the primary concern for Bahrain's economy due to its oil reserves?

Limited oil reserves Signup and view all the answers

What is the name of the offshore oil field shared with Saudi Arabia?

Abu Saafah Signup and view all the answers

What is the primary goal of Bahrain's economic diversification efforts?

To diversify the economy due to limited oil reserves Signup and view all the answers

What percentage of GDP does the oil and gas sector account for in Bahrain?

20-25% Signup and view all the answers

What was the impact of the successful implementation of offshore banking in Bahrain?

Redirected the emphasis of job and wealth creation within the economy, while increasing overall operating costs Signup and view all the answers

What is the name of the first major industry to be developed in Bahrain?

Aluminium Bahrain Signup and view all the answers

What was the trend in Bahrain's manufacturing growth since the 1981/82 oil price declines?

Erratic growth Signup and view all the answers

What is the sector that is expected to play a key role in Bahrain's diversification efforts?

Both manufacturing and service sector Signup and view all the answers

Study Notes

Bahrain's Oil Reserves and Economic Diversification

Bahrain's oil reserves are limited compared to other Gulf States.
The country's onshore field, Jabel Al-Dukham, has been declining in production for the last decade.
The offshore field, Abu Saafah, is shared with Saudi Arabia, and new oil finds are unlikely.

Economic Diversification Efforts

The government has been actively diversifying the economy to reduce dependence on oil.
Early industrial ventures include the Arab Shipbuilding and Repair Yard (ASRY) and the Aluminium Bahrain Company (Alba).
The country established an offshore banking sector in 1975.
Private sector enterprises are involved in various industries, including beverages, plastics, and downstream aluminum products.

Manufacturing Sector

The manufacturing sector's growth has been erratic since the 1981/82 oil price declines.
The industry experienced contractions in 1982, 1983, and 1984, with 1984 being the only year with positive growth.
Rapid diversification of the economy is crucial as oil reserves are depleted.

Service Sector

The service sector, particularly banking, is expected to play a key role in diversification efforts.
The oil and gas sectors earn about two-thirds of government revenues, but have only a 20-25 percent share of GDP.

Aluminium Bahrain (ALBA)

ALBA was established in 1968 by a consortium of international companies and the Government of Bahrain.
Bahrain's advantages in attracting the aluminum industry include cheap natural gas, low labor costs, and a favorable investment climate.
The company initially suffered high losses, but the government was able to sell 20 percent of its equity to SABIC in 1979.

Arab Shipbuilding and Repair Yard (ASRY)

ASRY was established in 1977 and is owned by five OAPEC countries, each with 18.84 percent shares.
ASRY's ability to compete is limited by its high labor costs, but its location is advantageous.
The company's average annual workload declined from 110 vessels to 54 vessels between 1979 and the mid-1980s.

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Description

This quiz covers the oil reserves, production, and exploration in Bahrain, as well as the government's efforts to diversify the economy. It includes information about the onshore and offshore oil fields, declining production, and new finds.