Historical Significance
The Bahrain Petroleum Company holds a distinction no other company in the Gulf can claim: it is the oldest petroleum enterprise in the GCC. Established in 1929, BAPCO predates the discovery of oil in Saudi Arabia, Kuwait, Abu Dhabi, and Qatar. The company struck oil at Jebel Dukhan in 1932, making Bahrain the first Gulf state to produce crude petroleum.
That early discovery gave Bahrain a developmental head start of decades over its neighbours. The revenue stream from BAPCO’s operations funded the initial build-out of modern infrastructure, education, and healthcare in the kingdom. It also established the institutional framework — regulatory structures, technical expertise, commercial relationships — that would shape Bahrain’s economic development for generations.
BAPCO’s history is, in many respects, the history of modern Bahrain.
Operations
BAPCO’s operations centre on the Sitra refinery, located on the eastern coast of Bahrain. The refinery is the kingdom’s primary petroleum processing facility, converting crude oil into refined products including gasoline, diesel, jet fuel, naphtha, and fuel oil.
Refinery capacity. The Sitra refinery has a processing capacity of approximately 267,000 barrels per day. This capacity significantly exceeds Bahrain’s domestic crude oil production from its own fields (approximately 40,000 barrels per day), with the balance of feedstock supplied through crude imports and production from the Abu Sa’fa offshore field shared with Saudi Arabia.
Refinery modernisation. BAPCO has undertaken a major refinery modernisation programme — the BAPCO Modernisation Programme (BMP) — designed to increase capacity, improve conversion efficiency, and produce higher-value refined products. The modernisation represents one of the largest industrial investments in Bahrain and is critical to maintaining the refinery’s competitiveness against modern refineries in the region.
Crude oil production. Bahrain’s domestic crude oil production from its own fields has declined to approximately 40,000 barrels per day. Proven reserves are estimated at approximately 125 million barrels. The Abu Sa’fa offshore field, shared equally with Saudi Arabia under a bilateral agreement, provides additional production that supplements domestic supply.
Natural gas. BAPCO manages natural gas production and processing, supplying gas to industrial consumers including Alba’s aluminium smelting operations, which require substantial energy input.
Corporate Structure
BAPCO was originally established as a concession operation of Standard Oil of California (later Chevron). The Bahrain government progressively acquired ownership, achieving full nationalisation. The company now operates as a state-owned enterprise under the umbrella of Nogaholding (the National Oil and Gas Authority holding company), with Mumtalakat maintaining strategic interest in Bahrain’s energy sector.
The nationalisation of BAPCO followed the pattern seen across Gulf oil producers in the 1970s, as producing states asserted sovereign control over their hydrocarbon resources.
The Depletion Challenge
BAPCO’s strategic challenge is existential: Bahrain’s domestic oil reserves are depleting. With approximately 125 million barrels of proven reserves and production of approximately 40,000 barrels per day from its own fields, the arithmetic is straightforward. Bahrain cannot sustain oil production at historical levels indefinitely.
This reality — which the kingdom has confronted longer than any other GCC state — is the fundamental driver of the Economic Vision 2030. BAPCO’s operations must be understood not as the foundation of Bahrain’s economic future but as a declining asset whose revenue provides the transition funding for diversification.
The Sitra refinery modernisation programme partially addresses this by shifting value creation from crude extraction (limited by reserves) to petroleum refining (limited by capacity and efficiency). A modern, efficient refinery can process imported crude and generate value regardless of domestic production levels. This strategic pivot — from producer to processor — extends the economic relevance of BAPCO beyond the life of Bahrain’s domestic oil fields.
Employment and Economic Contribution
BAPCO is a significant employer in Bahrain, with a workforce that includes substantial Bahraini national representation. The company’s training and development programmes produce technical professionals with skills in petroleum engineering, refinery operations, maintenance, and project management.
The petroleum sector’s contribution to GDP has declined as a percentage of total output, reflecting both production declines and the growth of non-oil sectors. However, oil revenue remains a critical component of government fiscal income, making BAPCO’s performance directly relevant to the government pillar’s fiscal sustainability aspiration.
Strategic Outlook
BAPCO occupies a paradoxical position in Bahrain’s economic architecture. The company is the kingdom’s oldest and most historically significant enterprise, yet it operates in the sector that the Economic Vision 2030 is designed to move beyond. The refinery modernisation programme represents an investment in extending the relevance of petroleum processing. But the broader trajectory — declining domestic production, diversification imperatives, energy transition pressures — points toward a future where BAPCO’s relative economic contribution continues to diminish.
The company’s role in the vision period is to manage the transition: maintain revenue generation, execute the modernisation programme, and provide the fiscal bridge that funds diversification in financial services, manufacturing, tourism, and technology.