Bahrain’s Bapco sees oil trading opportunities as it expands refinery

Sun, 2019-03-10 09:25

DUBAI: Bahrain plans to commission its expanded oil refinery by
early 2023, allowing it to sell and trade more petroleum products
in the Gulf region and Asia, the chief executive of state-owned oil
company Bapco said.
The expansion will boost the capacity of its Sitra oil refinery to
360,000 barrels per day (bpd) from the current 267,000 bpd, Bapco
CEO Pete Bartlett said.
Bapco currently receives 220,000-230,000 bpd of crude from state
oil company Saudi Aramco and will import the same volume during the
refinery’s expansion, with commissioning scheduled for late 2022
or early 2023, Bartlett said.
In October 2018 Aramco and Bapco announced the commissioning of the
AB-4, a new phase of the Saudi-Bahrain crude oil pipeline, capable
of transporting up to 350,000 bpd, which would serve Bahrain’s
planned refinery expansion.
“We are on track,” Bartlett said of the expansion.
The small non-OPEC Gulf oil producer, with around 124.6 million
barrels of proven reserves, gets its oil revenue from two fields:
the onshore Bahrain field, and the offshore Abu Safah field, which
is shared with Saudi Arabia. The Bahrain field produces around
50,000 bpd.
Bahrain and top oil exporter Saudi Arabia split revenues from the
300,000-bpd Abu Safah field, where production is overseen by
“Aramco and Bapco are strong partners and so our purchases of
feedstock are unaffected by what OPEC is doing in terms of managing
its own sales,” Bartlett said when asked whether Saudi exports to
Bahrain would be affected by OPEC-led supply cuts.
The refinery expansion and resulting production increase may prompt
Bapco to focus more on spot trading, but the company is unlikely to
establish its own trading joint venture like other national oil
companies in the Middle East, Bartlett said.
“We will buy more feedstock and will be trading more products,”
Bartlett said, adding the company would continue to look also at
trading spot cargoes.
“We will be looking to develop off-take arrangements and sale
arrangements further but our core markets will remain within the
greater GCC (Gulf region) and increasingly we will find ourselves
competing for opportunities in Asia.”
Around 88 percent of the crude that Bapco refines comes from
neighboring Saudi Arabia, and the rest from Bahrain’s field.
The refinery’s expansion project financing – which is over $4
billion in size – will be finalized in March, Bartlett said.
“We have been actively working with a number of export credit
agencies and commercial banks … We’re on the cusp of concluding
the financing arrangements.”
Bapco had awarded contracts for the project to a consortium
comprising TechnipFMC, Samsung Engineering and Tecnicas
Bahrain announced last year its largest ever oil discovery, off the
coast, estimated to have at least 80 billion barrels of tight oil,
and deep gas resources in the region of 10-20 billion cubic
It is talking to US oil companies with shale oil expertise about
developing those resources and hopes to have an interested company
by the end of the year, the country’s oil minister said last

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Source: FS – All-News-Economy
Bahrain’s Bapco sees oil trading opportunities as it expands refinery