Institutional Role
The National Oil and Gas Authority (NOGA) is the regulatory and supervisory body responsible for Bahrain’s hydrocarbon sector. Established to provide strategic oversight of the kingdom’s oil and gas resources, NOGA sits at the apex of Bahrain’s energy governance structure, directing policy, granting exploration and production licences, supervising the operations of the Bahrain Petroleum Company (BAPCO), and managing the revenue flows that — despite decades of diversification — continue to underpin the kingdom’s fiscal position.
NOGA’s mandate encompasses the full scope of hydrocarbon governance: upstream exploration and production, midstream processing and transportation, downstream refining and marketing, and the strategic management of Bahrain’s petroleum revenue. The Authority operates under the supervision of a board chaired by senior government officials, reflecting the sector’s centrality to Bahrain’s national interests.
In a kingdom where oil was first discovered in 1932 — the first commercial discovery on the Arabian side of the Gulf — NOGA is the institutional custodian of an industry that predates Bahrain’s independence and that has shaped the kingdom’s economic development, social welfare system, and geopolitical positioning for nearly a century.
The Bahrain Field
The Bahrain Field (Awali Field), discovered in 1932, is the kingdom’s principal onshore oil-producing asset. Located in the central part of Bahrain island, the field has been in continuous production for over nine decades — one of the longest production histories of any oil field in the Middle East.
The Bahrain Field’s production, while historically significant, is modest by Gulf standards. Output has declined from historical peaks to approximately 45,000 to 50,000 barrels of oil per day, reflecting the natural depletion of a mature field. Associated gas production supplements Bahrain’s gas supply but does not meet the kingdom’s total gas demand, which has grown with industrialisation and power generation requirements.
NOGA oversees the management of the Bahrain Field through BAPCO, applying enhanced oil recovery techniques, well workover programmes, and reservoir management strategies designed to maximise the remaining economic life of the field. The challenge is characteristic of mature fields globally: extracting remaining reserves from a depleted reservoir requires increasing investment and technical sophistication for declining output.
In 2018, Bahrain announced a significant new oil discovery — the Khaleej Al Bahrain offshore basin — with estimated resources of at least 80 billion barrels of tight oil and significant gas reserves. The announcement generated considerable attention, though the development of tight oil resources in an offshore deepwater environment presents technical and commercial challenges that are substantially different from conventional production. NOGA has been working with international partners to assess the technical feasibility and commercial viability of developing these resources, a process that will unfold over years rather than months.
Abu Sa’fah Revenue Sharing
The Abu Sa’fah offshore oil field, located in the Gulf waters between Bahrain and Saudi Arabia, is one of the most financially significant — and least publicly discussed — elements of Bahrain’s fiscal architecture. The field is operated by Saudi Aramco, but Bahrain receives revenue from its production under a bilateral arrangement between the two kingdoms.
The revenue sharing arrangement dates to the 1958 agreement between Bahrain and Saudi Arabia and has been periodically renegotiated. The precise terms of the arrangement are not fully public, but the revenue that Bahrain receives from Abu Sa’fah production is a significant supplement to the kingdom’s oil income — by some estimates, the Abu Sa’fah revenue rivals or exceeds the revenue from Bahrain’s own Bahrain Field production.
The Abu Sa’fah arrangement carries geopolitical significance. It represents a tangible financial transfer from Saudi Arabia to Bahrain that reinforces the bilateral relationship and provides Bahrain with fiscal support that the kingdom’s own hydrocarbon resources cannot sustain independently. The arrangement is widely understood as reflecting both historical claims and the broader Saudi interest in Bahrain’s stability — an interest that was demonstrated dramatically during the 2011 unrest when Saudi-led GCC forces entered Bahrain to support the government.
NOGA’s role in managing the Abu Sa’fah revenue, ensuring compliance with the bilateral agreement’s terms, and periodically negotiating adjustments is one of the Authority’s most important — and most sensitive — responsibilities.
BAPCO Supervision
The Bahrain Petroleum Company (BAPCO) is the state-owned integrated oil company that NOGA supervises. BAPCO’s operations encompass oil production from the Bahrain Field, the operation of the Sitra refinery (Bahrain’s sole refinery), and the marketing of refined petroleum products.
The Sitra refinery has undergone a major modernisation programme — the BAPCO Modernisation Programme (BMP) — that represents one of the largest infrastructure investments in Bahrain’s recent history. The modernisation programme expanded the refinery’s capacity from approximately 267,000 barrels per day to approximately 380,000 barrels per day, upgraded the facility to process heavier crude grades, and improved the quality of refined product output to meet evolving international fuel specifications.
The refinery modernisation is strategically important for several reasons. First, it increases BAPCO’s processing capacity, allowing the refinery to process crude oil imported from Saudi Arabia and other sources in addition to Bahrain’s own production — generating refining margins on throughput that exceeds domestic crude supply. Second, it improves the refinery’s product slate, enabling production of higher-value products (ultra-low-sulphur diesel, jet fuel, petrochemical feedstock) that command premium pricing. Third, it positions Bahrain as a refining hub within the Gulf, processing crude for regional and international markets.
NOGA’s supervision of BAPCO encompasses operational oversight, capital investment approval, strategic direction, and the coordination of BAPCO’s activities with the kingdom’s broader energy policy objectives. The Authority ensures that BAPCO’s commercial operations align with Bahrain’s national interests, including employment of Bahraini nationals, environmental compliance, and contribution to government revenue.
Exploration Strategy
NOGA manages Bahrain’s upstream exploration strategy, including the licensing of exploration acreage to international oil companies and the assessment of the kingdom’s undeveloped hydrocarbon potential.
The exploration strategy has evolved from a focus on the mature Bahrain Field toward offshore and unconventional opportunities. The Khaleej Al Bahrain discovery has reshaped the strategic picture, raising the possibility that Bahrain’s hydrocarbon future could be substantially different from the trajectory of gradual depletion that conventional assessments had projected.
NOGA has engaged international oil companies and service companies in exploration and appraisal activities, seeking the technical expertise and investment capital necessary to evaluate and potentially develop Bahrain’s offshore and unconventional resources. The kingdom’s licensing rounds have attracted interest from companies experienced in deepwater and tight oil development, although the commercial terms and development timeline remain subject to ongoing assessment.
Role in the Economic Vision 2030
NOGA’s role within Bahrain’s Economic Vision 2030 is paradoxical. The Vision explicitly targets diversification away from hydrocarbon dependence, yet NOGA’s mandate is to maximise the value of Bahrain’s hydrocarbon resources. The paradox is resolved by recognising that diversification is a decades-long process and that hydrocarbon revenue will remain essential to Bahrain’s fiscal position throughout the transition period. NOGA’s task is to ensure that the kingdom’s oil and gas resources generate the maximum revenue possible during the period when that revenue funds the diversification investments — education, financial sector development, industrial capacity, infrastructure — that the Vision requires.
The refinery modernisation programme exemplifies this logic. By upgrading the Sitra refinery, Bahrain captures more value from each barrel of crude oil processed, generating refining margins that supplement declining upstream revenue. The refinery also creates industrial employment and develops technical skills that contribute to the broader industrialisation objective.
NOGA is, in this context, the institution that funds the transition. Its effectiveness in maximising hydrocarbon revenue determines the fiscal space available for the investments in human capital, infrastructure, and institutional development that the Economic Vision 2030 demands. The better NOGA manages Bahrain’s hydrocarbon endowment, the more resources the kingdom has to build the post-hydrocarbon economy that is the Vision’s ultimate objective.