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Image used for illustrative purpose. Oil industry well pumps crude oil up from the ground on an oil field in the desert. Bahrain, Middle East
Bahrain's national oil company BAPCO will announce a new investment programme in 2021 as part of its expansion programme to shift to high-value products, its chairman said.
In an interview with Gulf Intelligence on Wednesday, BAPCO Chairman Dawood Nassif said the current and planned new investments would help the company shift the barrel upwards into high-value distillates and hasten its exit from the fuel oil business.
"The future is clear for us - our barrel is focused on diesel and jet fuel, and naphtha to be converted into higher-value petrochemicals," he said during the interview.
Nassif explained that fuel oil doesn't have a future in BAPCO's product slate with prices below languishing crude, and more stringent IMO [International Maritime Organisation] regulations in the works.
The current investment [more than $6 billion BAPCO Modernisation Programme or BMP] has reduced fuel oil's share to about six percent, and the investments planned for 2021 would enable the company to fully exit the business fully by 2025.
"One investment will destroy what is left of fuel oil after the Resid Hydrocracker [under BMP] comes into operation in 2022. The other investment will come at the end of the barrel where we will convert naphtha into petrochemicals," he said.
Under the BMP project, the crude refining capacity is being increased from existing 267,000 barrels per day (bpd) to 380,000 bpd, which Nassif pointed out is the "the size of the refinery that is required in today's world," adding that the "hydrogen-efficient" project is now 60 percent complete.
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