(MENAFN- Brazil-Arab News Agency (ANBA)) From the Newsroom
São Paulo - Bahrain is set to allow foreign companies to own 100% of oil and natural gas extraction projects, as per information from the prime minister Khalifa bin Salman al Khalifa reported in Arab news agencies. To be eligible, the company must have signed, or be in the final stages of signing, an exploration and production agreement with the government.
According to the websiteArabian Business , the move comes after anInternational Monetary Fund (IMF) reportfrom early May suggesting Bahrain expects to fall short of some of the goals it set as part of a fiscal adjustment programme tied to a USD 10 billion economic aid package from Saudi Arabia, UAE, and Kuwait, some of Bahrain's Gulf Cooperation Gulf (GCC) allies.
According to IMF forecasts, Bahrain's oil revenues will constitute 5.4% of its Gross Domestic Product (GDP) in 2019 and 5.7% in 2020, falling short of the 6.2% and 6.6% outlined in the fiscal adjustment programme. State spending is expected to account for 24% of GDP in 2019 and 23.1% in 2020, compared to previous targets of 22.6% and 21.6%.
The aid package from the allies is linked to a few reforms designed to eliminate the country's budget deficit, but last time the country revised the budget indicated that it may take longer than expected to balance it. The IMF report says that delays in fiscal adjustment, a sharp tightening of global financing conditions, and lower oil prices present risks to the Arab country.
Oil and gas are important revenue sources for Bahrain and their lower prices present a challenge to balance the country's budget. S & P Global's forecast for Bahrain's average real GDP growth over 2019-2022 is 2.4%. The risk assessment agency expects the infrastructure development, including several large projects like the refinery modernization program, to support growth.
Translated by Guilherme Miranda
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