As the regions oldest national oil company, Bapco has long been regarded as a forward-thinking organisation with a skilled workforce made up predominantly of Bahraini nationals. However, as oil production started to decline, so too did Bapcos ability to develop major schemes, especially through incremental increases in the Sitra refinerys capacity, without the help of Saudi Arabia. The refinery has long been the countrys most profitable enterprise, but there is no doubt that it is now in dire need of a significant upgrade.
As with all brownfield projects, the main emphasis will be on maintaining output while carrying out the rehabilitation and expansion. The financial implications of losing even a months unplanned production would be catastrophic for Manama. The downside to this is that the cost of the rehabilitation will be much higher than if a similar scheme were tendered in Saudi Arabia. The project is likely to be the largest ever in Bahrains energy industry and the nature of the work highly technical.
It is highly likely the upgrade will be staggered, as opposed to being executed in one phase. The reason behind this is cost. Securing finance will be easier if the work takes place at a slower pace, as it can be split into smaller values for each package. No decision has yet been made regarding this, but it will be a surprise if it all goes ahead at the same time.
Aside from the refinery, Bapcos main focus will be working with partners to increase the countrys modest oil and gas production. This is likely to offer an even more robust challenge than the refinery rehabilitation. Oil and gas reserves are believed to be there, but most are extremely deep and would require significant initial investment.
Domestically, the firm is now working closely with the National Oil & Gas Authority to ensure the kingdom is supplied with the hydrocarbons required to drive growth and create jobs and prosperity. The past three years have been difficult in Bahrain due to regional protests, but there has been little disruption to energy supplies.
Bapcos prospects for future growth and success will rely massively on the success of the refinery upgrade. If the project progresses without too much disruption to production, as well as hitting its budgetary targets, then Bapco will enter the next decade in excellent shape. However, the next six years are going to be the most important in the companys recent history.