Page 5 - DMEA Week 29

DMEA COMMENTARY DMEA

(BAPCO) Sitrah refinery is largely dependent
on the Saudi-Bahrain A-B oil pipeline for feed- talking about creating a state oil fund and hold-
stock, running primarily on around 225,000 ing an IPO in the style of Aramco. However, this
bpd of Arabian Light crude, which is delivered and the gas roadshow are likely to be derailed
from processing facilities at Abqaiq, which clean for the time being by global economic strug-
remove sand and sulphur from the crude. gles. While the Aramco IPO was somewhat
BAPCO and Aramco commissioned phase of a domestic success, it was a far cry from the
four of the A-B oil pipeline in 2018, taking total international spectacle that was promised when
capacity to 350,000 bpd. The long-planned the plan was first announced. Manama is short
$350mn link comprises a 112-km, 762-mm on funds and the idea of such a listing will be
pipeline that replaces the ageing existing link, appealing, but no Bahraini NOC will hold the
with the main engineering, procurement and allure of Aramco, and expectations should be
construction (EPC) contracts apportioned in tempered accordingly.”
2015. While ADNOC has already been very suc-
The completion of the new conduit was a cessful in divesting stakes in pipeline, distribu-
prerequisite for progress on a similarly long- tion and refining assets, and Aramco is likely to
planned expansion of the refinery. The $6bn find willing buyers for a stake in its pipelines,
refinery upgrade programme kicked off last year Bahrain is undoubtedly a less attractive proposi-
and will increase capacity from 267,000 bpd to tion, and may struggle for attention, particularly
360,000 bpd. given Nogaholding’s BB- rating by Fitch. ™
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
assets we have are certainly part of what they
would regard as good investments; they have
good returns.”
Ian Simm, principal advisor at consultancy
IGM Energy, told MEOG: “Bahrain has been

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