Page 7 - MEOG Week 29

MEOG Commentary MEOG

Map of the KAB.

Source: HCNRES Bahrain

development contracts for three offshore blocks. Ian Simm, principal advisor at consultancy
Meanwhile, Bahrain Petroleum Co.’s IGM Energy, told MEOG: “Bahrain has been
(BAPCO) Sitrah refinery is largely dependent talking about creating a state oil fund and hold-
on the Saudi-Bahrain A-B oil pipeline for feed- ing an IPO in the style of Aramco. However, this
stock, running primarily on around 225,000 and the gas roadshow are likely to be derailed
bpd of Arabian Light crude, which is delivered for the time being by global economic strug-
from processing facilities at Abqaiq, which clean gles. While the Aramco IPO was somewhat
remove sand and sulphur from the crude. of a domestic success, it was a far cry from the
BAPCO and Aramco commissioned phase international spectacle that was promised when
four of the A-B oil pipeline in 2018, taking total the plan was first announced. Manama is short
capacity to 350,000 bpd. on funds and the idea of such a listing will be
The long-planned $350mn link comprises appealing, but no Bahraini NOC will hold the
a 112-km, 762-mm pipeline that replaces the allure of Aramco, and expectations should be
ageing existing link, with the main engineering, tempered accordingly.”
procurement and construction (EPC) contracts While ADNOC has already been very suc-
apportioned in 2015. cessful in divesting stakes in pipeline, distribu-
The completion of the new conduit was a tion and refining assets, and Aramco is likely to
prerequisite for progress on a similarly long- find willing buyers for a stake in its pipelines,
planned expansion of the refinery. The $6bn Bahrain is undoubtedly a less attractive proposi-
refinery upgrade programme kicked off last year tion, and may struggle for attention, particularly
and will increase capacity from 267,000 bpd to given Nogaholding’s BB- rating by Fitch.™
360,000 bpd.
In May, Bahraini Oil Minister Sheikh
Mohamed bin Khalifa bin Ahmed Al Khalifa
declared that the BAPCO expansion was 50%
complete.
Al-Khalifa noted that Bahrain intended to
“make some of the oil and gas assets available
for the private sector,” suggesting that the coun-
try would follow in the footsteps of Abu Dhabi
National Oil Co. (ADNOC) and, more recently,
Saudi Aramco in selling or leasing stakes in
infrastructure and project management subsid-
iaries to bring short-term returns on long-term
assets.
Al-Khalifa added: “We have been talking to
the pension fund here, and the quality of the Map of the Bahrain’s
assets we have are certainly part of what they hydrocarbon assets.
would regard as good investments; they have
good returns.” Source: Oilprice

Week 29 22•July•2020 www. NEWSBASE .com P7