Bahrain Petroleum Co., or Bapco, is evaluating two bids on behalf of the National Oil and Gas Authority, or NOGA, received last month for a deep gas exploration and production sharing contract under tender for onshore Bahrain, a senior company official said.

“The company received two bids about two weeks ago but the tender still has not been awarded yet,” Adel Khalil Almoayyed, Bapco’s acting deputy chief executive for exploration and production, told Zawya Dow Jones.

According to the Bahrain Tender Board, the two companies that submitted technical and financial proposals on June 25 are Occidental Middle East Development Co., the regional subsidiary of Occidental Petroleum Corp., and Canadian Natural Resources Ltd. Both offers are still under evaluation.

“Price shall be the principal criterion in case of fulfillment of technical and other criteria, this means that the lowest price bidder is not necessarily awarded the tender,” the Bahrain Tender Board said in a statement.

The contract is being tendered as part of a bidding round launched last October by Bahrain aimed at developing gas reservoirs at depths of up to 20,000 feet below its onshore Awali field.

In February, NOGA, which will eventually award the contract, said 18 companies had initially registered to acquire data for the country’s deep gas exploration round.

Poor interest in the Bahraini gas round was likely due to low gas prices at present, Eckart Woertz, chief economist at Dubai’s Gulf Research Center said.

“Gas prices in the long term may go up but at the moment they are very low and gas investments are very capital intensive,” Woertz said.

According to a Bapco official, who declined to be named, companies’ bids will take into consideration the gas prices they require for their exploration program.

“It’s a risky business but they will fix the price that will make money for them and the minimum cost for any of the wells, which are 15,000-20,000 feet, will be $20 million,” the official said.

The Persian Gulf island state is seeking to boost gas output amid rising demand requirements, which are set to rise to 2 billion cubic feet a day over the next 10 years.

According to NOGA’s Web site, total production of both natural and associated gas increased 4% in 2007 to 508 billion cubic feet from 488 billion cubic feet in 2006.

Bahrain has also engaged in talks with Qatar and Iran to look into possible gas import plans.  

(Dow Jones & Rigzone)