Mark Thomas, CEO, nogaholding: Interview

Interview:  Mark Thomas

Where do you identify the main opportunities and challenges related to Bahrain’s target of reaching net-zero carbon emissions by 2060?

MARK THOMAS: Because the 2060 net-zero target is more long term, it is not necessarily at the forefront of our work programme at present. What we are mainly working towards is the more pressing target of reducing greenhouse gas emissions by 30% by 2035. We have set our baseline for this reduction in 2015, as that was when the Paris Agreement on global emissions levels was signed.

Bahrain’s greenhouse gas emissions were relatively consistent between 2015 and 2020, averaging around 35m-36m tonnes of CO a year. To meet the 30% target, we will need to eliminate 10m-12m tonnes on an annual basis. That is a significant number, and while planting trees can certainly help, we need to implement more impactful solutions such as carbon capture and sequestration (CCS). Indeed, that is the technology that stakeholders in Bahrain’s energy sector are looking at most seriously.

Bahrain’s reputation as a centre for industry in the region and beyond lends itself well to the cluster approach of CCS, and the country has significant advantages when it comes to this method. Its primary advantage is the fact that the technology does not have to go offshore: Bahrain has depleted onshore fields into which CO can be injected.

Another strength is that the cluster of industrial sources of CO would be centred around the kingdom’s electricity generators. Other sources of emissions include the refinery managed by the Bahrain Petroleum Company (Bapco) and Bahrain’s direct-reduced iron facility. Importantly, these CO emissions are produced within a 12-km radius. As such, Bahrain has a significant advantage in terms of the infrastructure needed to collect emissions in a centralised concentration facility. The country will not have to transport the concentrated CO offshore. Instead, it can do everything through onshore piping into a concentration facility. That will give the country an economic advantage, and put Bahrain in an advantageous position to meet these important objectives.

What will drive growth in the oil and gas sector as the economy recovers from the pandemic?

THOMAS: Bahrain is not a significant producer of crude oil for export. The only export volume in the country comes from the offshore Abu Safa field, at approximately 150,000 barrels a day (bpd) at full market price. Domestically, production from the onshore Bahrain Field has been relatively stable, at 40,000-45,000 barrels a day, with output going directly to the Bapco refinery.

Bahrain had a strong revenue stream in 2021 due to the increasing price of oil that year, which benefitted the wider economy. The primary upstream focus has been on developing gas assets, ensuring that the country has sufficient supplies of natural gas to power the economy for the next decade and beyond. As such, we will continue to explore for gas.

It is important to note that the country’s future engine of growth will be in downstream activities. The real value of the energy sector is in its downstream refining and marketing activities. Consequently, Bapco is undertaking a significant refinery upgrade: a $7bn investment, representing the largest single investment in Bahrain’s history. Once the project is complete, the refinery’s capacity will increase from about 267,000 bpd to 380,000 bpd.

More importantly, it will give the refinery greater flexibility on the feedstock it can accept, on the products it makes and on its ability to target certain markets. Much of the equipment needed for the upgrade was already in place in January 2022. While there were some delays due to the pandemic, the facility looks set to open by late-2023 or early 2024.