Bahrain Petroleum Company

Trade name	BAPCO
Company type	State-owned enterprise
Industry	Petroleum
Founded	1929 (1929) (original company) 1999 (1999) (current company)
Founder	Standard Oil Company of California (original company)
Headquarters	Awali , Bahrain
Key people	Abdulrahman Jawahery (CEO)
Owner	Government of Bahrain
Website	www.bapco.net

The Bahrain Petroleum Company (BAPCO) is an integrated petroleum company that is the national oil company of Bahrain.

BAPCO was established in 1929 in Canada by Standard Oil Company of California for oil exploration activities in Bahrain.^[1][2][3] It took over Bahrain's assets of Gulf Oil.^[1] In 1930 it obtained the only oil concession in Bahrain.^[4] BAPCO discovered first oil in 1931.^[5] On 31 May 1932, the company discovered the Bahrain Field (Awali Field). After exporting oil and constructing a refinery, it started with 10,000 barrels per day (1,600 m³/d) refining capacity in 1936.^[3] Later that year the Standard Oil Company of California signed an agreement with Texaco, which acquired a half of BAPCO's shares.^[1] In 1975 more than 60% BAPCO's shares was acquired by the Government of Bahrain. In 1980, all BAPCO's shares were taken over by the Government of Bahrain.^[1][6] In 1978 the oil sector was nationalized and BAPCO assumed full control of the national energy sector.^[5] In 1999, the current Bahrain Petroleum Company was created when the Bahrain National Oil Company, established in 1976, merged with BAPCO.^[1][6] In 2018 BAPCO commissioned a new pipeline that replaced the over 70 years old pipeline infrastructure between Bahrain and Saudi Arabia.^[3] In March 2019 construction work was started to upgrade the main oil refinery Sitra. The $5 billion project will increase the capacity to 380,000 barrels per day (60,000 m³/d).^[3] Abdulrahman Jawahery is CEO of the BAPCO.^[7]

In August 2021, BAPCO signed a five year agreement for catalyst management with Chevron Joint Venture for $240 million. The clean fuels group specialist Advanced Refining Technologies (ART) which is the joint venture of Chevron and W. R. Grace & Company, will supply there Resid Hyrdocracking catalyst technology for the new Resid Hydrocracking unit (1RHCU) that is to be operational by 2023.^[8][9]

In October 2021, BAPCO was released from the base oils joint venture with Neste and Nogaholding, ending the presence of Neste in Bahrain.^[10]

On 6 February 2022, BAPCO signed a Memorandum of Understanding (MoU) with Aluminium Bahrain B.S.C. (Alba) for the implementation of Environment, Social and Governance (ESG) initiatives.^[11][12]

In 2023, BAPCO became part of the BAPCO Energies brand together with Bahrain National Gas Company (Banagas), Bahrain National Gas Expansion Company (Tawseah), Bahrain Aviation Fueling Company (Bafco) Tatweer Petroleum, and Bapco Retail Company (Tazweed).^[13]

BAPCO is a founding company of the Gulf Downstream Association (GDA).^[14]

The Bapco Modernisation Programme (BMP) completed the construction of the main control building in July 2023 and celebrated with a ceremony, in which for the first time ever in the Middle East a three-dimensional model of the BMP was presented. The ceremony was attended by Nasser bin Hamad Al Khalifa, who was also given a tour of the facilities and briefed about further BMP project progress. The BMP was 90% complete by August 2023.^[15][16]

In July 2023, Bapco Energies launched its Sustainability Linked Finance Framework, which fits into Bahrain's sustainability and climate change commitments to reduce emissions by 30% by 2035 and a net zero by 2060. In accordance with Bahrain's new energy strategy, Bapco Energies B.S.C began additional developments in August 2023 to become an energy company with fossil fuel based renewable energies. The company aims to generate 20% of Bahrain's energy from renewable sources by 2035 and continues to seek investment opportunities in renewable energy projects and carbon reduction technologies.^[17][18][19]

In March 2024, BAPCO began a cooperation with TotalEnergies in order to optimize its Sitra refinery.^[20][21] A strategic partnership between the two companies, which began in July 2024, provides BAPCO with additional market opportunities and trading strategies, as well as access to TotalEnergies' networks.^[22]

BAPCO is an integrated oil company operating in the field of refining, and marketing. It operates a 267,000-barrel-per-day (42,400 m³/d) oil refinery which lies midway between the original BAPCO expat workers accommodation township of Awali and Sitra.^[23] The complex also includes storage facilities for 14 million barrels (2.2 million cubic metres), a marketing terminal, and a marine terminal. 95% of the company's products are for exports.^[5] About one-sixth of this crude originates from the Bahrain Field, with the remainder being pumped from Saudi Arabia. Saudi Aramco supplies approximately 350,000 barrels per day (56,000 m³/d) through the 112-kilometre (70 mi) pipeline from Aramco's Abqaiq Plant.^[24][25] Once the flagship Sitra refinery's expansion is completed in 2023, its capacity will be increased from 267,000 bpd to 380,000 bpd.^[25][26][27]

On December 2, 1925 the British Eastern and General Syndicate acquired from the Sheik of Bahrain an oil concession (full text: ^[28]) over 100,000 acres with exclusive right to develop the area. Shortly thereafter the concession was extended to cover all of Bahrain. On November 30, 1927, the Eastern Gulf Oil Co. subsidiary of Gulf Oil bought an option on the concession, to be exercised before January 1, 1929. In 1928 Gulf Oil became a shareholder in the Near East Development Corporation which was awarded a 23.75% stake in the Iraq Petroleum Company. Thus, Gulf Oil was bound by the Red Line Agreement, which stipulated that Gulf Oil would not be allowed to exploit Bahrain oil without the involvement of the other members of IPC, or rather, if it did, it would bear all the downsides of exploration and still would have to share the spoils with the rest of the group. When IPC was unwilling to exercise the option jointly, Gulf Oil on December 21, 1928 sold it to the Standard Oil Company of California.^[29]: 71

The agreement was divided into a 2-year exploration phase ("First Schedule"), covering all of Bahrein, a surface search not exceeding 20 feet of depth for signs of hydrocarbons, followed by a 2-year prospecting (exploratory drilling) phase ("Second Schedule") at the end of which a mining lease over 100,000 acres divided in no more than 3 blocks was to be awarded, followed by a 55-year mining lease period ("Third Schedule").

A considerable diplomatic back-and-forth developed during the following years in which the British government asserted its political influence when due to lack of British investment United States capital was attempting to gain access under the terms that were apparently, in the eyes of Britain, not meant to apply to foreigners.

On December 2, 1927 the exploration license was extended for one year by the Sheikh.^[30] The British Secretary of State for the Colonies Leo Amery in June 1928 instructed his Political Resident in the Persian Gulf to effect an alteration of the concession to include the stipulation that the lease holder had to be a company under British or British Dominion law.^[31] The Eastern and General Syndicate (EGS) sent 3 geologists to the island in the winter of 1927/1928 and by October 1928 had decided to attempt to get a further extension of the exploration phase and send more geologists.^[32] When EGS could not find a British company willing to invest in the enterprise, they turned to an American company that was subject to the Iraq Petroleum Company Red Line Agreement. EGS had received one pessimistic prospect for oil from their first geologist, 4 optimistic prospects thereafter and were at the time planning to send geologist #1 back again to reexamine all available evidence.^[33] Secretary Amery, acting via the Colonial Office, then tried to get the British company clause inserted by asking EGS to try and insert it in the course of obtaining their second licence extension,^[34] to which EGS objected, because it would have alienated their option holder Gulf Oil. EGS in turn wanted the British government to lean on the Anglo-Iranian Oil Company (AIOC) or through AIOC on the Iraq Petroleum Company (IPC). The lack of interest shown by AIOC and the Gulf Oil purchase of an option applied also to other EGS concessions that had been won: in Kuwait, Hasa province (Saudi Arabia) and the Neutral Territory between Saudi Arabia and Kuwait. It was Gulf Oil who approached EGS after they had talked to a EGS geologist who had returned from the Middle East to the United States. Two agreements were signed on November 30, 1927: (1) Gulf Oil's option on the Bahrein concession and (2) Gulf Oil's option on all other (Mainland) EGS concessions.^[35] EGS paid the 10,000 rupees annual royalty (stipulated by Article VI) to the Bahrein state on December 2, 1928^[36] Standard Oil of California created a Canadian subsidiary in anticipation of what would be acceptable to the British government, the Bahrein Petroleum Company and stood ready to begin work on the concession. In April 1929, EGS was still trying to get approval of the transfer of the concession from the British Colonial Office.^[37] In an interdepartmental conference representatives of the British government prepared arguments to present to EGS that either their concession had lapsed (which was the result of British resistance), or that the request for an extension was (would have been) without merit. The conference then compiled a list of stipulations beneficial to the British government under which they would be willing to recommend to the Sheikh to extend the licence. The company was to be registered in Britain, the chairman, managing director, local general manager and the whole local staff with some exceptions were to be British.^[38] The Colonial office was delighted when in a July 19, 1929 meeting EGS did not dispute the right of the British government to impose restrictions and it was not necessary to make use of the prepared arguments.^[39] The American reply was essentially a refusal of all conditions. They opposed most strongly lack of control over local personnel in charge.^[40] EGS paid the 10,000 rupee annual royalty on December 2, 1929.^[41]

...

The concession was formally assigned to the Bahrein Petroleum Company Ltd on August 1, 1930.^[42] BAPCO applied for the prospecting licence to run for 2 years from December 2, 1930.^[43]

In June 1932 the Jebel Dukhan No. 1 well struck oil at a depth of 2,008 feet and flowing at a rate of 2,400 bbl/day, No. 2 well struck oil at the same depth flowing at a rate of 1,500 bbl/d. Both where named after a 450ft high hill into which they were sunk.^[44]

Once oil was found, the conditions were very favorable. All the technical equipment needed to lay a pipe and construct a loading dock from local building materials could be fitted on a single ship. The tanker El Segundo with a crew of 45 sailed from San Pedro on December 28, 1933^[46] and arrived via Mumbai on February 22, 1934. She anchored 16,000 feet offshore beyond the stretch of shallow water that was to be bridged by a 12-inch pipeline resting on the ocean floor. Five 8-ton anchors at the loading berth held in place 5 marking buoys at a depth of 50 feet of water. On the island of Sitrah, 3 tanks totalling 250,000 barrels and one 7,500 barrel tank for ballast water were erected from sheet steel brought by the El Segundo. From the terminal on Sitrah to the wells, 10 miles of gathering lines were laid. The loading capacity of the terminal was built to an initial capacity of 10,000 barrels per day. A road was built to the terminal, including 1,200 feet of a trestle and a draw bridge.^[47] The El Segundo departed with a fresh load of 25,000 barrels in August 1934, bound for Yokohama.^[48]

A 10,000 bbl/d refinery was built in 1936, before it was completed a contract was let for the second unit to double its capacity, at which point it began limited operations of those parts of the processing chain already completed.^[49][50] The Oil and Gas Journal published a technical description in the 1937-12-30 issue, stating the capacity as 25,000 bbl/d, but in principle capable of more if a few bottlenecks were removed.^[51]

The Italian air force bombed the refinery on October 19, 1940.

• Official website