MANAMA, Bahrain - Bahrain on Wednesday announced its newly discovered shale oil reserve was estimated to contain more than 80 billion barrels, making the once-marginal oil producer potentially a major player in the market.
The amount of recoverable oil -- or oil that can be extracted -- is still under study, Oil Minister Sheikh Mohammed bin Khalifa Al-Khalifa told a press conference in Manama.
The field covers 2,000 square kilometers (772 square miles) in shallow waters off the kingdom's west coast, which faces oil giant Saudi Arabia.
The new field would in theory dwarf the Bahrain Field, the country's only other oil field, which contains several hundred million barrels.
The actual impact of the discovery is contingent on how much of it is actually extractable.
Yahya al-Ansari, exploration manager at Bahrain's national oil company Bapco, said that the pumping of oil from the field is not expected for at least 5 years.
Speaking to reporters after Wednesday's press conference, Ansari said Bahraini authorities, in cooperation with international oil companies, were trying to establish how much oil can be extracted.
"What we have announced is oil in place ... So far, we don't know how much of it can be extracted and the cost of its production," two important elements that could determine whether the major announcement is viable.
"The US shale oil industry normally extracts 5-10 percent of the known shale oil reserves and raising this percentage depends on the advancement of technology," Ansari said.
The Bahraini minister and Ansari refused to be drawn into providing details about how much production Bahrain is likely to have in 5 years.
Shale oil production is a costly business and is far more expensive than conventional oil. In some cases, high cost makes production commercially not possible.
International consultants DeGolyer and MacNaughton, Halliburton, and Schlumberger are heading the project with Bahrain's National Oil and Gas Authority.
Analyst Stephen Brennock of broker PVM Oil said the find has "the potential to be a game changer" for the tiny Gulf kingdom.
"However, it is still early days and the reserves of the field have yet to be finalized. Moreover, it will be several years before these newly found supplies are brought online," Brennock told AFP.
JBC Energy, an independent research center, was equally cautious.
"It remains completely unclear yet how much of the 80 billion barrels can be seen as recoverable reserves. Furthermore, apparently it is a shale oil reservoir, which would inflate production costs.
"Nonetheless it is a significant discovery and even if only a small fraction of it can be produced it would change Bahrain's position in the region substantially," a JBC analyst said.
Bahrain, which sits between regional arch-rivals Saudi Arabia and Iran, was the first of the Gulf states to discover crude but is today the smallest of the Gulf producers.
The tiny Sunni-ruled kingdom currently produces some 50,000 barrels per day of crude oil from the Bahrain Field, discovered in 1932.
Manama also gets another 150,000 barrels daily from the Abu Saafa offshore field, which it splits equally with Saudi Arabia.
The kingdom has also discovered natural gas estimated at between 10 trillion cubic feet and 20 trillion cubic feet, Sheikh Mohammed said.
Bahrain, which is not a member of the Organization of Petroleum Exporting Countries (OPEC), is nonetheless part of an agreement between OPEC and non-OPEC members to cut oil production in the wake of the 2014 market crash.
The Gulf Cooperation Council, which groups Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates, together pump around 17 million barrels of oil per day, equivalent to some 18 percent of global production or 55 percent of OPEC's output.
To help cope with the drop in oil revenues following the collapse in crude prices, slashed by half since mid-2014, the GCC states decided to impose a value-added tax of 5 percent from 2018.