Bapco Bahrain
   HOME

TheInfoList



OR:

The Bahrain Petroleum Company (BAPCO) is an integrated
petroleum Petroleum, also known as crude oil or simply oil, is a naturally occurring, yellowish-black liquid chemical mixture found in geological formations, consisting mainly of hydrocarbons. The term ''petroleum'' refers both to naturally occurring un ...
company that is the
national oil company A national oil company (NOC) is a petroleum company that is fully or partly owned by the government of a sovereign nation. NOCs produce about half the world’s oil and gas. Due to their increasing dominance over global reserves, the importance ...
of
Bahrain Bahrain, officially the Kingdom of Bahrain, is an island country in West Asia. Situated on the Persian Gulf, it comprises a small archipelago of 50 natural islands and an additional 33 artificial islands, centered on Bahrain Island, which mak ...
. It was founded in 1929 and discovered the first oil field in the Persian Gulf outside of Iran in 1932. Shipments of crude oil commenced in 1934 and in 1936 the first refinery in the Gulf outside of Iran was built. The founders were the American Standard Oil of California, which was soon joined by Texaco, operating under British rule. While Bahrain never was a high-volume crude oil producer, the American joint venture a few years later came into possession of the vast Saudi Arabian oil reserves, which are located on the mainland in the vicinity of Bahrain Island. Supplied from the mainland, the refinery though exceeded the capacity of the Bahrain oil field from its inception and was among the largest in the region.


Overview

BAPCO was established in 1929 in
Canada Canada is a country in North America. Its Provinces and territories of Canada, ten provinces and three territories extend from the Atlantic Ocean to the Pacific Ocean and northward into the Arctic Ocean, making it the world's List of coun ...
by
Standard Oil Company of California Chevron Corporation is an American multinational energy corporation predominantly specializing in oil and gas. The second-largest direct descendant of Standard Oil, and originally known as the Standard Oil Company of California (shortened to ...
for oil exploration activities in Bahrain. It took over Bahrain's assets of
Gulf Oil Gulf Oil was a major global oil company in operation from 1901 to 1985. The eighth-largest American manufacturing company in 1941 and the ninth largest in 1979, Gulf Oil was one of the Seven Sisters (oil companies), Seven Sisters oil companies. ...
. In 1930 it obtained the only oil concession in Bahrain. BAPCO discovered first oil in 1931. On 31 May 1932, the company discovered the Bahrain Field (Awali Field). After exporting oil and constructing a refinery, it started with refining capacity in 1936. Later that year the Standard Oil Company of California signed an agreement with Texaco, which acquired a half of BAPCO's shares. In 1975 more than 60% BAPCO's shares was acquired by the
Government of Bahrain The Cabinet of Bahrain is the chief executive body of the Kingdom of Bahrain. According to Article 32 (b) of the 2002 Constitution, "executive authority is vested in the King together with the Council of Ministers and Ministers". The Council of ...
. In 1980, all BAPCO's shares were taken over by the Government of Bahrain. In 1978 the oil sector was nationalized and BAPCO assumed full control of the national energy sector. In 1999, the current Bahrain Petroleum Company was created when the Bahrain National Oil Company, established in 1976, merged with BAPCO. In 2018 BAPCO commissioned a new pipeline that replaced the over 70 years old pipeline infrastructure between Bahrain and
Saudi Arabia Saudi Arabia, officially the Kingdom of Saudi Arabia (KSA), is a country in West Asia. Located in the centre of the Middle East, it covers the bulk of the Arabian Peninsula and has a land area of about , making it the List of Asian countries ...
. In March 2019 construction work was started to upgrade the main oil refinery
Sitra Sitra ( or , ''As-Sitra''), also known as Sitrah or Sitra Island ( ), is an island in Bahrain situated approximately south of the capital, Manama, which is on Bahrain Island. History The island of Sitra has witnessed various conflicts. One ...
. The $5 billion project will increase the capacity to . Abdulrahman Jawahery is CEO of the BAPCO. 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. In October 2021, BAPCO was released from the base oils joint venture with
Neste Neste Oyj (international name: Neste Corporation; former names Neste Oil Corporation and Fortum Oil and Gas Oy; ) is an oil refining and marketing company located in Espoo, Finland. It produces, refines and markets oil products, provides eng ...
and Nogaholding, ending the presence of Neste in Bahrain. 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. 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). BAPCO is a founding company of the Gulf Downstream Association (GDA). 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 Sheikh Nasser bin Hamad Al Khalifa (; born 8 May 1987), also known as Prince Nasser, is a member of the House of Khalifa, Bahraini royal family, Commander of Bahrain's Royal Guard (Bahrain), Royal Guard, deputy chairman of the Higher Committe ...
, who was also given a tour of the facilities and briefed about further BMP project progress. The BMP was 90% complete by August 2023. 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 A fossil fuel is a flammable carbon compound- or hydrocarbon-containing material formed naturally in the Earth's crust from the buried remains of prehistoric organisms (animals, plants or microplanktons), a process that occurs within geolog ...
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 Carbon () is a chemical element; it has chemical symbol, symbol C and atomic number 6. It is nonmetallic and tetravalence, tetravalent—meaning that its atoms are able to form up to four covalent bonds due to its valence shell exhibiting 4 ...
reduction technologies. In March 2024, BAPCO began a cooperation with
TotalEnergies TotalEnergies SE is a French multinational integrated energy and petroleum company founded in 1924 and is one of the seven supermajor oil companies. Its businesses cover the entire oil and gas chain, from crude oil and natural gas explorati ...
in order to optimize its Sitra refinery. 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.


Operations

BAPCO is an integrated oil company operating in the field of refining, and marketing. It operates a
oil refinery An oil refinery or petroleum refinery is an industrial processes, industrial process Factory, plant where petroleum (crude oil) is transformed and refining, refined into products such as gasoline (petrol), diesel fuel, Bitumen, asphalt base, ...
which lies midway between the original BAPCO expat workers accommodation township of Awali and
Sitra Sitra ( or , ''As-Sitra''), also known as Sitrah or Sitra Island ( ), is an island in Bahrain situated approximately south of the capital, Manama, which is on Bahrain Island. History The island of Sitra has witnessed various conflicts. One ...
. The complex also includes storage facilities for , a marketing terminal, and a marine terminal. 95% of the company's products are for exports. About one-sixth of this crude originates from the Bahrain Field, with the remainder being pumped from
Saudi Arabia Saudi Arabia, officially the Kingdom of Saudi Arabia (KSA), is a country in West Asia. Located in the centre of the Middle East, it covers the bulk of the Arabian Peninsula and has a land area of about , making it the List of Asian countries ...
.
Saudi Aramco Saudi Aramco ( ') or Aramco (formerly Arabian-American Oil Company), officially the Saudi Arabian Oil Company, is a majority state-owned petroleum and natural gas company that is the national oil company of Saudi Arabia. , it is the fourth- l ...
supplies approximately through the pipeline from Aramco's Abqaiq Plant. Once the flagship
Sitra Sitra ( or , ''As-Sitra''), also known as Sitrah or Sitra Island ( ), is an island in Bahrain situated approximately south of the capital, Manama, which is on Bahrain Island. History The island of Sitra has witnessed various conflicts. One ...
refinery A refinery is a production facility composed of a group of chemical engineering unit processes and unit operations refining certain materials or converting raw material into products of value. Types of refineries Different types of refineries ...
's expansion is completed in 2023, its capacity will be increased from 267,000 bpd to 380,000 bpd.


History

On December 2, 1925 the British ''Eastern and General Syndicate'' (headed by Frank Holmes) acquired from the Sheik of Bahrain ( Isa bin Ali Al Khalifa) an oil concession (full text: ) 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 Gulf Oil was a major global oil company in operation from 1901 to 1985. The eighth-largest American manufacturing company in 1941 and the ninth largest in 1979, Gulf Oil was one of the Seven Sisters (oil companies), Seven Sisters oil companies. ...
bought an option on the concession, to be exercised before January 1, 1929. Gulf Oil was at the time a shareholder in the ''Near East Development Corporation'' which held a 23.75% stake in the
Iraq Petroleum Company The Iraq Petroleum Company (IPC), formerly known as the Turkish Petroleum Company (TPC), is an oil company that had a virtual monopoly on all oil exploration and production in Iraq between 1925 and 1961. It was jointly owned by some of the world ...
. Thus, Gulf Oil was bound by the
Red Line Agreement The Red Line Agreement is an agreement signed by partners in the Turkish Petroleum Company (TPC) on July 31, 1928, in Ostend, Belgium. The agreement was signed between the Anglo-Persian Company (later renamed British Petroleum), Royal Dutch/Sh ...
, which stipulated that the company would not be allowed to exploit Bahrain oil without the involvement of the other members of IPC, or rather, if they did, they 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 Chevron Corporation is an American multinational energy corporation predominantly specializing in oil and gas. The second-largest direct descendant of Standard Oil, and originally known as the Standard Oil Company of California (shortened to ...
.


Terms of the concession and British resistance to American participation

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 (ca 51% of the area of the country) divided into 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 after a 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. The British
Secretary of State for the Colonies The secretary of state for the colonies or colonial secretary was the Cabinet of the United Kingdom's government minister, minister in charge of managing certain parts of the British Empire. The colonial secretary never had responsibility for t ...
Leo Amery Leopold Charles Maurice Stennett Amery (22 November 1873 – 16 September 1955), also known as L. S. Amery, was a British Conservative Party (UK), Conservative Party politician and journalist. During his career, he was known for his interest in ...
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. 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. When EGS could not find a British company willing to invest in the enterprise, they turned to an American company that was as member of the
Iraq Petroleum Company The Iraq Petroleum Company (IPC), formerly known as the Turkish Petroleum Company (TPC), is an oil company that had a virtual monopoly on all oil exploration and production in Iraq between 1925 and 1961. It was jointly owned by some of the world ...
subject to the
Red Line Agreement The Red Line Agreement is an agreement signed by partners in the Turkish Petroleum Company (TPC) on July 31, 1928, in Ostend, Belgium. The agreement was signed between the Anglo-Persian Company (later renamed British Petroleum), Royal Dutch/Sh ...
and thus not outright able on their part to work the concession without first getting approval from the consortium. 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. Secretary Amery, acting via the Colonial Office (the conduit for all communication with EGS), 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, to which EGS objected, because it would have alienated their option holder Gulf Oil and would have put EGS at risk of losing the concession and stranded their investment. EGS in turn wanted the British government to lean on the
Anglo-Iranian Oil Company The Anglo-Persian Oil Company (APOC; ) was a British company founded in 1909 following the discovery of a large oil field in Masjed Soleiman, Persia (Iran). The British government purchased 51% of the company in 1914, gaining a controlling numbe ...
(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, May 6, 1923) and the Neutral Territory between Saudi Arabia and Kuwait (May 17, 1924). It was Gulf Oil who had approached EGS after talking to an EGS geologist (T. George Madgwick) 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. EGS paid the 10,000 rupees annual royalty (Article VI) to the Bahrein state on December 2, 1928. Standard Oil of California (SOCAL), not restricted by the Red Line Agreement, had in the meantime bought the option from Gulf Oil and on January 11, 1929 had incorporated a Canadian subsidiary, the ''Bahrein Petroleum Company'' in anticipation of what would be acceptable to the British government and stood ready to begin work on the concession. In April 1929, EGS was still trying to get approval for the transfer of the concession to SOCAL from the British Colonial Office. In an interdepartmental conference held in the Colonial Office on June 7, 1929, 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. 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. The American reply was essentially a refusal of all conditions. They opposed most strongly lack of control over local personnel in charge. ... EGS paid the 10,000 rupee annual royalty on December 2, 1929. ... The concession was formally assigned to the Bahrein Petroleum Company Ltd on August 1, 1930. BAPCO applied for the prospecting licence to run for 2 years from December 2, 1930.


Oil found in 1932

In June 1932 the '' Jebel Dukhan No. 1'' well (Dukhan Hill No. 1) at the southern base of the hill struck oil at a depth of 2,008 feet and flowing at a rate of 2,400 bbl/day, in January 1933 No. 2 well, 2.5 miles north of No. 1 and drilled with the same cable tool rig, struck 33° API gravity oil at the same depth flowing at a rate of 1,500 bbl/d. A rotary drill was substituted at No. 3 well at the depth of 1,635ft in order to explore lower lying strata. 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 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
Sitra Sitra ( or , ''As-Sitra''), also known as Sitrah or Sitra Island ( ), is an island in Bahrain situated approximately south of the capital, Manama, which is on Bahrain Island. History The island of Sitra has witnessed various conflicts. One ...
, 3 tanks totalling 250,000 barrels and one 7,500 barrel tank for
ballast water Ballast is weight placed low in ships to lower their centre of gravity, which increases stability (more technically, to provide a righting moment (physics), moment to resist any Heeling (sailing), heeling moment on the Hull (watercraft), hull). I ...
were erected from sheet steel brought by the El Segundo. From the terminal on Sitra to the wells, 10 miles of 6 and 8-inch gathering lines were laid. The loading capacity of the terminal was built to an initial 10,000 barrels per day. A road was built to the terminal, including 1,200 feet of a trestle and a
draw bridge A drawbridge or draw-bridge is a type of moveable bridge typically at the entrance to a castle or tower surrounded by a moat. In some forms of English, including American English, the word ''drawbridge'' commonly refers to all types of moveable b ...
. On June 7, 1934 the ''El Segundo'' departed with the first load of 25,000 barrels, bound for
Yokohama is the List of cities in Japan, second-largest city in Japan by population as well as by area, and the country's most populous Municipalities of Japan, municipality. It is the capital and most populous city in Kanagawa Prefecture, with a popu ...
, and brought 500 barrels back for analysis to
Richmond, California Richmond is a city in western Contra Costa County, California, United States. The city was municipal corporation, incorporated on August 3, 1905, and has a Richmond, California, City Council, city council.
where she arrived on August 1. And so, Bahrain oil entered the market a few weeks before the first oil from Kirkuk. In 1935 the decision was reached to build a 10,000 bbl/d refinery and ground was broken in October 1935 at a site on the northwest of the island opposite Sitra between the oil field and the loading dock. 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. 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 already capable of more if a few bottlenecks were removed. The official opening ceremony took place on December 11, 1937. By then, there were a total of three 12-inch, one 10-inch and one 8-inch sea loading lines (one for each type of refined product) and 2,407,150 barrels of storage capacity of which 541,200 were for crude oil. Exports of crude petroleum fell from 4,286,000 barrels (11,742 per day) in 1937 (most of it to France, Italy, Japan) to just 336,000 barrels in 1938 and stopped entirely afterwards. Bahrein became an importer of crude oil and an exporter of refined products. The Italian air force bombed the refinery on October 19, 1940, but caused practically no damage except that resulting from changing allocation of military resources in the aftermath. In 1945, a 34 mile 12-inch 62,000bpd pipeline was laid to connect the mainland's Dammam field to the refinery on Bahrein Island, whose capacity was concurrently increased to 60,000 barrels per day. The
Ras Tanura Ras Tanura (, presumably due to the unusual heat prevalent at the cape that projects into the sea) is a city and semi-governorate in the Eastern Province, Saudi Arabia, Eastern Province of Saudi Arabia located on a peninsula extending into the Per ...
refinery and associated pipeline infrastructure was built at the same time and began initial operations at 50,000bpd a little later at the end of 1945. ''Oil Weekly'' included a pretty map of all the infrastructure in the 1945-07-30 issue. To January 1, 1946 a total of 74 wells had been drilled: 62 producers, 4 observation and 8 were shut-in.


Notes


References


External links

* {{Authority control National oil and gas companies Non-renewable resource companies established in 1929 Oil companies of Bahrain Energy companies established in 1929 Standard Oil