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Bahrain's Bapco Finalizes Financing of Modernization Program

Sky view of Bahrain's capital, Manama, Asharq Al-Awsat
Sky view of Bahrain's capital, Manama, Asharq Al-Awsat
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Bahrain's Bapco Finalizes Financing of Modernization Program

Sky view of Bahrain's capital, Manama, Asharq Al-Awsat
Sky view of Bahrain's capital, Manama, Asharq Al-Awsat

The Bahrain Petroleum Company announced on Sunday reaching financial closure on its multi-billion-dollar Bapco Modernization Program (BMP) with 21 banks and credit agencies.

Estimated to cost around $4.1 billion, the BMP is set to expand what is considered one of the oldest refineries in the Arabian Gulf region.

Implementing a project of the strategic scale of BMP, scheduled to be completed in 2022, is guaranteed to effectively contribute to sustainable development efforts in Bahrain.

Under the program, the oil refinery connecting Bahrain and Saudi Arabia has been upgraded to boost pipeline delivery capacity from 260,000 bpd to 350,000 bpd.

BMP represents a major turning point for Bapco, which will not only boost its refining capacity, but also enhance its products in terms of quantity, quality and energy efficiency.

Bapco is one of the major oil companies in the region in terms of competitiveness and compliance with environmental standards.

Bapco has contracted with five credit agencies and 21 banks, which included several local and international, commercial and Islamic banks, to finance the mega project. Financing was formally secured on December 20 last year with BNP Paribas, HSBC Middle East and Verus Partners acting as financial advisers to help Bapco meet the conditions required successfully to close the financing process.

The foundation stone for the project was laid in March this year during a ceremony held under the patronage of Bahraini Prime Minister Prince Khalifa bin Salman Al Khalifa and in the presence of Bahrain’s Crown Prince Salman bin Hamad Al Khalifa, Deputy Supreme Commander and First Deputy Premier.

Bapco board director and chairman of BMP Steering Committee Dawood Nassif expressed delight at reaching the financial close of the vital Bahrain project.

Oil Minister Shaikh Mohammed bin Khalifa Al Khalifa lauded efforts exerted by the Bapco team to achieve the financial close.

Given the size and scale of the BMP, the program is perceived as a mutually beneficial conclusion for a wide variety of partners from across the globe because it means we can provide a wider product offering and meet higher demand from customers.

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Oil Rises on US Demand Strength, Though Macroeconomic Uncertainty Looms

FILE PHOTO A view shows oil pump jacks outside Almetyevsk in the Republic of Tatarstan, Russia June 4, 2023. REUTERS/Alexander Manzyuk/ File Photo
FILE PHOTO A view shows oil pump jacks outside Almetyevsk in the Republic of Tatarstan, Russia June 4, 2023. REUTERS/Alexander Manzyuk/ File Photo
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Oil Rises on US Demand Strength, Though Macroeconomic Uncertainty Looms

FILE PHOTO A view shows oil pump jacks outside Almetyevsk in the Republic of Tatarstan, Russia June 4, 2023. REUTERS/Alexander Manzyuk/ File Photo
FILE PHOTO A view shows oil pump jacks outside Almetyevsk in the Republic of Tatarstan, Russia June 4, 2023. REUTERS/Alexander Manzyuk/ File Photo

Oil prices rose on Thursday, recovering from a five-day losing streak, on signs of steady demand in the United States, the world's largest oil consumer, although concerns over the economic impact of US tariffs capped gains.

Brent crude futures was up 41 cents, or 0.6%, at $67.3 a barrel, as of 0607 GMT.

US West Texas Intermediate crude climbed 0.6% to $64.76, gaining 41 cents.

Both benchmarks slid about 1% on Wednesday to their lowest levels in eight weeks following US President Donald Trump's remarks on progress in talks with Moscow.

Trump could meet Russian President Vladimir Putin as soon as next week, a White House official said, though the US continued preparations to impose secondary sanctions, including potentially on China, to pressure Moscow to end the war in Ukraine.

Russia is the world's second-biggest producer of crude after the United States.

Still, oil markets found support from a bigger-than-expected draw in US crude inventories last week.

The Energy Information Administration said on Wednesday that US crude oil stockpiles fell by 3 million barrels to 423.7 million barrels in the week ended August 1, exceeding analysts' expectations in a Reuters poll for a 591,000-barrel draw.

Inventories fell as US crude exports climbed and refinery runs climbed, with utilization on the Gulf Coast, the country's biggest refining region, and the West Coast climbing to their highest since 2023.

Analysts at JP Morgan said in a note that global oil demand through August 5 has averaged 104.7 million barrels per day, tracking annual growth of 300,000 bpd, but 90,000 bpd below their forecast for the month.

"Despite a slightly soft start to the month, relative to our expectations, high frequency indicators of oil demand suggest global oil consumption is likely to improve sequentially over the coming weeks," the analysts said, with jet fuel and petrochemical feedstocks anticipated to drive the consumption growth.

Meanwhile, China's crude oil imports in July dipped 5.4% from June but were still up 11.5% year-on-year, with analysts expecting refining activity to remain firm in the near term.

Still, global macroeconomic uncertainty after the US ordered a fresh set of tariffs on Indian goods capped price gains.

Trump on Wednesday imposed an additional 25% tariff on Indian goods, citing their continued imports of Russian oil. The new import tax will go into effect 21 days after August 7.

"While these new duties (on India by the US) are set to take effect in three weeks, markets are already pricing in the downstream ripple effects on trade flows, emerging market demand, and broader energy diplomacy," said Phillip Nova's senior market analyst Priyanka Sachdeva.

Trump also said he could announce further tariffs on China similar to the 25% duties announced earlier on India over its purchases of Russian oil.

"Tariffs are likely to harm the global economy, which will ultimately affect fuel demand," said Phillip Nova's Sachdeva, adding that markets are overlooking the fact that its impact will still be much greater on the US economy and inflation.