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Powerhouse of the Bahrain Economy
The Bahrain Petroleum Company B.S.C. (Closed) is a fully integrated oil company wholly owned by the Bahrain Government. The Company is engaged in oil and gas exploration, production and refining.The refinery has a capacity of 265,000 bpcd. More than 90% of crude and refined product is exported.

Bapco made substantial progress during the year on its US$1,000 million investment programme which will propel the Company into the forefront of refining technology and make the Company a world leader in the production of low sulphur diesel. There were also significant milestones reached in oil and gas production and in refining performance.

The year was marked by important environmental projects, by extending quality assurance standards, and by innovative training methods to release the potential of its brightest employees.

Today, Bapco is the powerhouse of the Bahrain economy, exporting crude and refined products to markets in the Middle East, Africa, Asia and Far East, producing gas to power the industries of Bahrain, and providing fuel for the airline industry.

Strategic Investment Programme
Cornerstone of the Strategic Investment Programme is the building of a new Low Sulphur Diesel Plant, which will enable the Company to export diesel across the globe because it will meet the strictest environmental standards imposed by governments on exhaust emissions. Construction is 85% complete, and commissioning of the plant is expected to take place before June 2007. The skyline of Bahrain is changing in all ways.

In April a contract-signing ceremony took place for the construction of a large Refinery Gas Desulphurisation Plant, which will significantly reduce air emissions and improve the quality of air released to the atmosphere. About US$140 million is being spend on this project, which includes a host of new treatment and recovery facilities, the aim of which are solely environmental.

Acquiring and applying new technology is central to Bapco’s strategic planning, and this is particularly important in the areas of process control. The new Lube Base Oil Project will take on board what is known as Foundation Fieldbus technology. This will allow multiple process parameter readings from a pre-defined segment of the plant to be very reliably routed to the Control Room – without the likelihood of problems caused by noise or external interference.

Oil and Gas Production
Considerable progress was made on the Khuff Gas development project to ensure continuity of gas supply to meet the increasing demand necessary for power generation and other major industries in the Kingdom.

The first part of this programme is a $7.3 Million project to modify 5 existing Gas Decompression Units in the Oil Field to cater for the reduction of the gas reservoir pressure. The second part is a $45.4 Million project to install eight new GDUs. Half of the project has been completed with the remaining four GDUs due for commissioning in May 2007.

Oil and gas production was marked by the completion of the Khuff Development Drilling Programme four months ahead of schedule and well within budget. The program started in 2005 with the aim to complete eight wells by the end of 2006. One of the highlights was the completion of Well No. 744 which was drilled to a total depth of 11,400 feet in 51 days - nine days ahead of schedule.

The Shallow Development Drilling Program for the year included drilling 22 vertical wells and four re-entry wells.

Refining
Refining saw several record-breaking performances, thanks to a plant availability of 97.7% up to November 2006. This achievement is a reflection of the whole Company, covering oil processing, maintenance, reliability, power and utilities and many other supporting groups. As a result, all the indications are that the refinery’s average daily throughput target of 253,000 barrels will be exceeded for 2006.

One of the challenges facing the refinery is to continually reduce the heavy end of the barrel. So far this proportion of the barrel of refined product has been cut to just 21.3% - which means that an extra 400,000 barrels of heavy end has been converted to higher value product.

Another major achievement is the reduction of oil mass loss per month to just 0.59. This emphasis on waste reduction is a key element in planning for profitability, but the reduction itself is purely through the effort of the operators as they keep a watchful eye on leaks and flares. That employee commitment is worth US$3 million a year.

Protecting Our Seas
BAPCO recently announced a major expansion of its oil spill response capability, as part of its ongoing environmental protection programme. A new Command Centre in Awali has been commissioned by the Company, from which it will direct all oil spill related emergency operations.

In addition, the Company has commissioned a new support centre at Sitra which houses skimmers, booms and other oil spill combating equipment. This is the culmination of a year’s intensive effort to further enhance Bapco’s position as one of the prime movers in combating oil spills and protecting the environment in the Arabian Gulf.

Earlier this year the Company’s Oil Spill Planning and Management Committee held its 100th meeting – a significant milestone some 26 years after it became a founder member of GAOCMAO (Gulf Area Oil Companies Mutual Aid Organization) the predecessor of RECSO, (Regional Clean Sea Organization) the regional body for environmental cooperation.

Safety Milestone
Safety training was continually enhanced during the year, with the milestone of 5 million consecutive employee hours reached without a lost-time accident (LTA). Contractors too showed outstanding safety performance receiving awards for reaching - for the first time ever – three million consecutive employee-hours without a LTA.

Expanding Skills for a Changing Skyline
Bapco has a strong and justified reputation for its work in developing the talents of young Bahrainis, employed by the company and also those seeking employment.

There has been growing emphasis on the provision of externally validated technical, operational and management training and development courses.

During the year Bapco was accredited as a Centre for awarding Institute of Leadership and Management qualifications, and a BAPCO web site (Bapco Centre of Management Excellence) was built to enable a blended learning approach to internationally recognized management qualifications. Two groups of managers are now successfully following their studies towards this qualification.

Scholarship Scheme: Children of Bapco Employees
80 new awards were made in 2006, bringing the total currently in place to 270. These scholarships are of particular assistance to those employees who might not otherwise be able to financially support their children’s college education.

Scholarship Scheme: Professional
33 new awards were granted in 2006 in Chemical Engineering and Petroleum Engineering. This brings the total currently in this category to 69.

Company Address:
Bahrain Petroleum Company B.S.C. (Closed) BAPCO
P.O. Box 25555
Tel: +973-17704040, Fax: +973-17704070
E-mail: info@bapco.net
Website: www.bapco.com.bh