Founded: 1929

Chairman/CEO: Adel Khalil al-Moayyed

Tel: (+973) 1 775 5000

Web: www.bapco.net

Background

Bahrain Petroleum Company (Bapco) was founded in 1929 as a subsidiary of the US’ Standard Oil, in order to explore for oil in the Gulf country. In 1932, it discovered the Awali oil field – now known as the Bahrain Field and still the country’s most important oil resource. During a period of widespread nationalisation in the region, the government of Bahrain acquired a 60 per cent shareholding in the company and, in 1980, completely nationalised the firm. Bapco oversees all oil exploration, production, refining and distribution in Bahrain, including a 250,000-barrel-a-day (b/d) refinery.

Role in Bahrain’s economy

Bahrain is the smallest oil producer in the Gulf with an output of 48,000 b/d of oil in 2012. It is also paid the profits from 150,000 b/d of crude from a oil field it shares with Saudi Arabia and overseen by Saudi Aramco. The country also has one of the most diversified economies in the region, although its banking and service sector has been hit hard by the civil unrest ongoing since 2011.

Nevertheless, oil revenues account for about a quarter of gross domestic product and, in 2012, represented 87 per cent of government revenues, an increase on previous years. The country depended on Bapco for 77 per cent of the foreign currency raised through oil exports in 2012, much of which was used to fund a $13.2bn import bill.

Strategy

Bahrain was one of the first Gulf states to adopt enhanced oil recovery techniques, and in recent years has been able to arrest the slide in production at the Awali/Bahrain Field. The field is overseen by Tatweer Petroleum, a joint venture of the National Oil & Gas Authority, Mubdadala Development Company of Abu Dhabi and the US’ Occidental Petroleum, formed in 2009 to help boost production to about 100,000 b/d from around 40,000 b/d currently. Bapco is focused on finding partners to help develop new reserves, and is also planning an ambitious $9bn expansion of its Sitra refining facility to bring the fuel it produces up to international standards.

Subsidiaries

Bapco operates a horizontal management model and does not have any major subsidiaries. However, it is working on a pilot solar power project with the National Oil & Gas Authority and the US’ Petra Solar.

In recent years, Bapco has been able to arrest the slide in production at the Bahrain oil field

Sharing agreement

Bahrain produces about 48,000 barrels a day of oil. It also receives half of the profits of the Abu Safah field it shares with Saudi Arabia, although due to the small print of the contract, Saudi Aramco gets the credit for the whole 300,000 b/d. However, as all of the Abu Safah field’s output is exported, the Bapco refinery relies on oil imported from Saudi Arabia to maintain a production capacity of 260,000 b/d.

This is achieved via a 61.5-kilometre pipeline from the Eastern Province that transports crude oil to the Bapco refinery. The pipeline pumps 250,000 b/d directly to the Bapco refinery in an agreement that stretches back over 60 years.

Bapco is now planning a major refurbishment of its refinery, which will add 100,000 b/d of production. This has led to plans to build a new pipeline adjacent to the original in order to increase crude supply to the plant.