Interview: Pete Bartlett
To what extent can ongoing investment in hydrocarbons go hand in hand with renewable and alternative energy development? Is Bapco able to leverage relationships with other players in order to achieve its sustainability goals?
PETE BARTLETT: Our leaders understand the importance of building a more diverse and resilient economy. Oil and gas investment in Bahrain will continue to be very important, and the revenues generated will contribute to expanding the energy alternatives available within the kingdom.
This will take some time, of course, but we see developing all of Bahrain’s energy potential as important and will support those initiatives that make the most sense for the country. We estimate that Bapco has invested more than $400m in various environment-related projects, including our recent solar energy pilot in a venture with the US-based Petra Solar. We installed a number of solar power facilities in Awali and at the Sitra Refinery in collaboration with the University of Bahrain.
We will continue to work with our shareholders, NOGA Holding and other parties to explore similar opportunities in renewable energy.
How is Bapco’s role evolving within the context of the wider Bahrain economy? What is being done to ensure that Bapco can maintain its central position, and in what ways is the company working to modernise operations?
BARTLETT: I anticipate that Bapco will continue to play a central role in assisting Bahrain to get the most out of its oil and gas endowment. We continue to build on the legacy of the kingdom’s 80-plus years of history in the oil and gas sector. As a mature industry, our challenges continue to shift towards maximising the remaining benefits to society in a manner that protects the safety of our employees, contractors and the community at large. We are currently undertaking the Bapco Modernisation Programme (BMP). Our efforts under this initiative are progressing and come on the back of the decade-long $1.2bn strategic investment programme, under which we began to bring our products in line with global specifications, added facilities that gave us exposure to markets we wanted access to, such as our joint venture investment in base oils with Neste Oil, and made investments in reducing the environmental impact of our operations.
Our wastewater treatment plant might be the best example, with a capacity to treat 19,200 cu metres per day, protecting Bahrain’s environment and allowing us to be a responsible player in the kingdom’s industry. In upcoming years, the BMP will see us add some refining capacity, increase the yield of more valuable products, make important improvements in cost and further mitigate the facility’s environmental impact. We are using a combination of project and equity financing options to fund the investment.
What threats to the market have been identified, and how is Bapco planning to address these? What opportunities exist for Bapco to make acquisitions and strategic alliances outside of its traditional markets?
BARTLETT: Bapco is fully aware of the short- to medium-range anticipated threats to the market, namely product oversupply, low economic growth and increased competition from huge investments in refining, within the MENA region in particular, among other things. Hence, Bapco has developed pre- and post-modernisation project strategies to mitigate the impact of these issues.
Bapco is exploring collaboration with strategically aligned parties to deliver our products to both traditional and non-traditional markets. We have also begun selling to end-users as well as to traders.
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