His Highness Shaikh Salman - The Bahrain Petroleum ... Highness Shaikh Salman bin Hamad Al-khalifa...

2 Chairman’s foreword4 Highlights of 20086 Sales performance10 Business development12 Oil and gas production14 Refining operations16 Storage and distribution 16 Technological advances18 Personal development20 Protecting the environment21 Health and safety22 Community support22 Long-term aims

دارة بابكو كلمة �سعادة رئي�س اللجنة العليا لإ 2

اأهم اإجنازات عام 2008 5

اأداء املبيعات 7

تطوير العمل 10

اإنتاج النفط والغاز 13

عمليات التكرير 15

التخزين والتوزيع 17

التطّور التكنولوجي 17

فراد تطوير الأ 19

حماية البيئة 20

ال�سحة وال�سالمة 21

دعم املجتمع 23

اأهداف طويلة املدى 23

Reg. No. IBAR 091 IBAR 091 رقم الت�سجيل

Serving the world to serve Bahrain

His Highness Shaikh Khalifabin Salman Al-Khalifa

The Prime Minister of theKingdom of Bahrain

His Majesty King Hamadbin Isa Al-Khalifa

King of the Kingdom of Bahrain

His Highness Shaikh Salmanbin Hamad Al-khalifa

The Crown Prince of theKingdom of Bahrain andDeputy Supreme Commander


His HighnessShaikh Khalifa bin Salman Al-KhalifaThe Prime Minister

Your Highness,

I am deeply honoured to present to you, and to share with the people of Bahrain, this record of the achievements of The Bahrain Petroleum Company B.S.C. (Closed) for the year 2008.

Following the historic inauguration by Your Highness of the Low Sulphur Diesel Production complex in December 2007, a significant milestone was reached on 28 May 2008, when Bapco exported its first cargo of low-sulphur diesel. Since then, work has commenced on a segregated pipeline system with dedicated storage tanks to allow the first shipments of ultra-low sulphur diesel to be exported in 2009. Bapco is now at the forefront of those GCC companies capable of exporting large quantities of ultra-low sulphur diesel.

As part of Bapco’s strategic investment programme, a joint venture agreement was signed on 16 June 2008, by Oil & Gas Holding Company, Bapco and Neste Oil of Finland for a US$430m lube base oil manufacturing plant. This will further expand Bapco’s global sales.

It is appropriate, therefore, that the theme of this year’s Review should reflect Bapco’s growing strength as a supplier to the international oil markets.

Other significant developments during the year were the agreements signed with international oil companies for the exploration and development of all four Bahrain offshore Blocks.To promote future production from the Bahrain Field, companies were given approval to increase the depth of gas drilling operations, while work started on the first of eight new wells to be drilled under the 2008-2011 Khuff Development Programme.

The year also saw construction of the US$150 million Refinery Gas Desulphurisation Plant, which, when it comes on-stream in 2009, will dramatically improve the environmental impact of our refining operations. Our status as a responsible company was further enhanced when we gained certification following compliance with the environmental management standard ISO14001:2004.

At the refinery, a new record for the highest crude run in a single month was set in May 2008, when the crude run averaged 270.3 MBPD. This was followed by a record low mass loss of 0.57% in September, reflecting the efforts of engineering, maintenance and operating staff.

Once again, Bapco’s safety record for 2008 was outstanding, and meant the Company became eligible for entry into the prestigious Sword of Honour Award given by the British Safety Council to the top 40 safest companies in the world. I am proud of the way our employees, and those of our contractors, have worked to make Bapco such a safe place.

Significant progress was made on Bapco’s e-procurement programme, with a successful pilot project leading to preparation for full-scale implementation. This is in direct support of Bahrain’s e-Government initiative. The Company also made progress along the road to public tendering, in coordination with the Government Tender Board, despite the complex nature of many of its contracts. Both these will assist the Company’s efforts to achieve greater transparency.

Through a combination of focused management, aggressive marketing, sustained quality and employee commitment, I believe that, with your guidance, we can face the difficult future with confidence.

On behalf of the Bapco Board of Directors, management and employees, I offer my wholehearted gratitude to His Majesty the King, to Your Highness, and to His Highness the Crown Prince, for the support given to all of us in Bapco as we seek to serve the Government of Bahrain.

Chairman’s Foreword

Annual Review 2008 2 - 3

Dr. Abdul-Hussain bin Ali Mirza

Minister of Oil and Gas AffairsChairman of the National Oil and Gas Authority (NOGA)Chairman of the Board CommitteeThe Bahrain Petroleum Company B.S.C. (Closed)


Highlights of 2008

• Bahrain Phased Field Development Project is tendered by NOGA and bid evaluations are conducted on three international oil companies (IOCs).

• A joint venture agreement is signed for a US$430m lube base oil manufacturing plant in Bahrain.

• The Company achieves its highest refining margin. • EPSA agreements are concluded between NOGA and IOCs for the exploration and development of all four offshore oil blocks.

• Drilling commences in October as part of a US$200m development programme to increase Khuff Gas production.

• Construction of the new US$150m Refinery Gas Desulphurisation Plant is completed.

• First export cargo of low-sulphur diesel leaves Bahrain on 28 May.

• Bapco gains certification for environmental management standard ISO 14001:2004 following a two-stage audit by Bureau Veritas.

• A new record for the highest monthly crude run is set in May with an average of 270.3 MBPD (thousand barrels per day*).

• A Five Star Safety Award by the British Safety Council makes the Company eligible for a prestigious Sword of Honour international award.

• Agreement in principle is reached to replace the 60+ year old pipeline between Saudi Aramco and the Bahrain Refinery.

• Bapco laboratory wins three international awards, including that of Top Performing Laboratory, in competition with 50 other centres.

• 618 is the final total of Bahrainis graduating from the Skills for the Workplace initiative organised by Bapco in association with the Ministry of Labour.

• Employees work 4.9 million hours without a single lost-time accident.

*A barrel is equivalent to 159 litres.


From its marine terminal at Sitra, Bapco exports refined products to more than 40 countries worldwide.


Serving the worldto serve Bahrain

The theme of the 2008 Annual Review is Serving the world to serve Bahrain. The theme has been chosen to reflect Bapco's growing stature as a reliable provider of quality petroleum products to the international marketplace. During the past year, the Company exported to more than 40 countries around the world.

For many years now, crude and 95 percent of refined products have been destined for overseas markets. Exports include liquefied petroleum gas (LPG), naphtha, gasoline, kerosene, aviation and jet fuel, diesel, fuel oil, asphalt, and sulphur.

Today, Bapco is at the forefront of process technology with the coming on-stream of the Low Sulphur Diesel Production (LSDP) complex. This enables the Company to enter new international markets, with the most environmentally-friendly products available. These products have a higher value than in the past, and will help the Company maintain its crucial role as the key provider of wealth to the Kingdom.

Strong sales bolster national economy A strong demand for refined product throughout the first half of the year enabled the Company to export 81.3 million barrels in 2008 compared with 86.5 million barrels in 2007. The decrease in international sales arose from planned process unit shutdowns and increased domestic demand.

Because of the strong international demand for almost all refined products throughout most of 2008, the Company achieved its highest refining margin. In particular, margins for diesel and kerosene were strong throughout the year, thanks to the first full year of operation of the LSDP which increased yields of middle distillates.

The end of the year did experience a softening of the naphtha and gasoline markets due to the downturn in petrochemicals in the Asian region, and a general fall in product demand as a result of the global financial and economic crises. Nevertheless, Bapco was able to maximise the benefit from high product prices through careful planning and refinery optimisation, which resulted in high average crude runs, particularly during the early part of the year. The situation was also aided by planned major shutdowns falling towards the end of the year.

The Lyra Pioneer at Sitra Wharf taking on Bapco’s first shipment of low-sulphur diesel on 28 May 2008.


JAPANBapco has had a long-standing relationship with Japan, who are one of our main customers for naphtha. Naphtha is used primarily for the manufacture of petrochemicals.

Photo: The wax-coated paper umbrella plays an important role in traditional culture, including tea ceremony and dance drama.


The jewel in Bapco's crown is its capability to produce up to 100,000 BPD (barrels per day) of ultra-low sulphur diesel (ULSD), which has a sulphur content of less than 10 parts per million (ppm). This meets the most stringent requirements almost anywhere in the world. No other refiner in the region is able to produce ULSD on such a large scale.

Since the commissioning of the new Low Sulphur Diesel Production (LSDP) facilities in June 2007, Bapco has been gradually phasing in lower sulphur diesel cargoes. The first phase saw 24 cargoes of 500 ppm low-sulphur diesel shipped out. The second phase was reached when the Company exported the first cargo of 50 ppm low-sulphur diesel aboard the ship Lyra Pioneer in May 2008. Preparations for the final phase - a segregated pipeline system with dedicated storage tanks for the export of ultra-low 10ppm sulphur diesel - were largely completed by the end of the year.

Crude prices saw a spectacular rise throughout the first half of the year, peaking in July at US$147. The rapid unfolding of the financial crisis, followed closely by the economic crisis, saw crude oil prices spiralling downwards to finally rest 70% below the July peak despite attempts by OPEC to bolster prices during the latter half of the year. The global economy was facing a crisis of confidence and credit.

Sales of crude oil from the Abu Safah offshore field amounted to 54.5 million barrels, a similar figure to 2007, very different was the average sales price realised, which was approximately US$91 per barrel compared with the figure of US$66 achieved during 2007. The Kingdom of Bahrain holds an equity share of 150,000 barrels per day in the Abu Safah field production.

The Low Sulphur Diesel Production Complex puts Bapco at the forefront of refining technology.

Refined Product Sales

U.A.E.

India

Qatar

Netherlands

Japan

Mozambique

Saudi�Arabia

Oman

Indonesia

Rest�of�the�world

32.9%

14.0%

11.0%

5.4%

4.9%

4.4%

3.0%

2.6%2.4%

19.3%


AUSTRALIATransportation costs mean that distance from the market place affects the competitiveness of Bapco products, and also impact on profit margins. Nevertheless, Bapco has been successful in shipping crude to many Far Eastern destinations and Australia.

Photo: Early morning in the rainforest of the Yarra Ranges in Victoria.

Business developmentgiven sharper focus


To provide a sharper focus on its strategy of Growth and Diversification the Company has created a new Strategy & Business Development Division headed by a General Manager to explore and evaluate business opportunities, in and outside Bahrain.

Significant progress was made in exploration and development of oil and gas resources, and three investment projects forming part of the current strategic investment programme also moved forward. A brief overview of these developments follows.

1. Exploration and Development The Bahrain Field Phased Development Project (BFPDP) is the largest and most important project of its type undertaken by Bapco. The project will increase the daily production of oil and gas, and generate additional oil and gas reserves, thereby increasing revenue to the Kingdom of Bahrain.In conjunction with NOGA, an Incremental Development Production Sharing Agreement was tendered. Following the second phase bidding round, bids from three companies were opened by the Tender Board and preliminary negotiations commenced with the preferred bidder, Occidental Petroleum (OXY).

The year 2008 also marked the initiation of a new exploration project to explore for gas in the deep Paleozoic geologic layers of the Bahrain Field. This Bahrain Deep Gas initative was launched by NOGA on 27 October, supported by three road shows which attracted strong interest from international oil companies.

2. Offshore ExplorationThe Offshore Exploration Bid Round that was initiated in 2007 by NOGA was concluded with the award of Block 2 to PTTEP of Thailand and Blocks 3 and 4 to Occidental Petroleum. In 2008 the remaining Block 1 located to the north of Bahrain was also awarded to OXY.The exploration programme on Blocks 2, 3 and 4 has already been started with geochemical surveys on Blocks 3 and 4 completed in December and a start made on seismic processing and interpretation of 2D and 3D data.

3. Gas Import VentureBahrain has enough gas to guarantee current commitments. However, any further industrial expansion will depend on new finds, or require a long-term supply contract with one of its neighbours.NOGA signed a framework agreement with Iran to develop the gas resources of Blocks 15 and 16 of South Pars Field and Bahrain is to seek partnership with interested and capable international oil companies to fast-track this initiative.

The Weatherford Drilling Rig is the largest and most modern ever to be contracted by Bapco for its strategic Bahrain Oilfield development programme.


4. Lube Base Oil PlantA joint venture agreement was signed in June 2008 by Nogaholding, Bapco and Neste Oil of Finland for a lube base oil manufacturing plant. The EPC (Engineering, Procurement and Construction) contract for the US$314m project was signed with the Korean contracting company Samsung Engineering in August 2008. A Bapco project team left for South Korea in September to work on the Detailed Design Engineering and Procurement phase of the project, which is scheduled to go on-stream late 2011. Neste Oil - which has been in the high-quality lube oil business for a long while with a commanding market share - provides a perfect partner creating many synergistic benefits. Bapco will operate the plant while Neste Oil will market the lube oils, which will provide a significant upgrade in quality and value to Bapco's product slate.

5. A-B PipelineAgreement was reached to replace the 60+ year old A-B crude oil pipeline from Saudi Aramco to the Bapco Refinery with a new 30-inch diameter pipeline, running 115 kilometres along a new route to avoid residential areas.To meet the forecasted increase in crude oil demand, the pipeline capacity will be increased from the current 235,000 BPD to 350,000 BPD of Arabian Light Crude. Cost of the project is estimated at US$350million with a late 2011 completion date.

6. Independent Terminal - BahrainBapco continued to participate in the feasibility study to build and operate an independent petroleum storage terminal and marine facility at Sitra in Bahrain in partnership with IPG of Kuwait and APICORP. Audex Pte Ltd of Singapore is conducting the Front End Engineering Design (FEED) study for the terminal.

GEO, an exhibition and conference, is used to promote oil and gas exploration and development opportunities in Bahrain.

The Company’s rigging group have taken their first step towards full membership of the Lifting Equipment Engineers Association, the world’s foremost authority in this field.


Oil andgas production

Management of the Oil FieldBapco achieved an average daily oil production of 32,861 barrels during 2008. Compliance with the policy of eliminating all gas flaring and venting in the field was a main factor contributing to the overall decline of field production. But an active drilling and work-over programme, together with increased gas injection rates, combined with intensive preventative maintenance schedules, helped reduce this decline to around 4%.

The Development Wells Drilling Programme encompasses 48 new oil wells. By the end of the year, 40 vertical wells were successfully drilled and 22 new well sites became available for drilling during 2009. In addition, drilling for the Special Wells Programme, consisting of 21 unconventional wells, continued unabated during the year, with new records set of new wells being put into production within three weeks of the rig moving out.

Among the measures taken to enhance production was Coiled Tubing Stimulation. Because conventional stimulation techniques have not been effective in horizontal and re-entry wells, seven wells were stimulated with coiled tubing in 2008. This measure has significantly increased oil and non-associated gas production. A second measure, acid fracturing treatment, was performed on 13 wells tapping into the tight reservoirs of the Bahrain Field.

Significant initiatives aimed at arresting the oil production decline in future years include:• A study to optimally design the Arab Zone re-entry wells. • Drilling horizontal wells to enhance oil production from the Kharaib reservoir. • Drilling two test wells to evaluate potential of the currently unproductive zones below the Arab reservoirs.

Management of the Khuff Gas FieldDaily gas production averaged 1,192 MMSCFD (million standard cubic feet per day) in 2008, an increase of 87 million over the previous year’s average, ensuring that the demands of all sectors in Bahrain were met.

During the year the Company signed an agreement to supply an extra 55 MMSCFD to GIIC iron plant, bringing the total supply to that company to 120 MMSCFD.Commissioning of new facilities such as Khuff gas dehydration units (GDUs), distribution lines, and valve stations enhanced the reliability of the natural gas system. In addition, the engineering design to lay a new gas pipeline to Al-Dur Power Plant was completed.

Increased Khuff gas production capacity is of national importance and good progress was made on the US$200 million investment plan to increase gas production capacity by 500 million cubic feet per day. This involves drilling eight new gas wells and constructing seven new gas dehydrators. The first well was completed in December.


KENYA73% of the gasoline exported by Bapco goes to Africa, with Kenya taking the lion’s share. Some of this product helps sustain the transport system which links medical centres and schools with the villages of the Samburu region.

Photo: Samburu women singing at a tribal festival.


Refining operations breakmore records

The average crude run to the Refinery was 257,400 BPD, of which 32,900 BPD came from the Bahrain Field with the remainder Arabian Light Crude through the A-B pipeline. This was 3,000 BPD above target.

Refining operations turned in another strong performance. Thanks to effective teamwork between engineering, maintenance and process unit operations, five annual records were broken in 2008:• Lowest fuel oil yield at 15.8%v• Highest asphalt yield at 3.6%v• Highest liquid recovery at 101.2%v• Lowest mass loss at 0.59wt%• Highest refining margin

Also, significant monthly records of the decade were achieved during the year:• Highest crude run of 270.3 MBPD was attained in May. • Lowest fuel oil yield of 14.0% was achieved in July.• Lowest mass loss of 0.57wt % was achieved in September.

The first full year of Hydrocracker operation has resulted in the total product yield reaching a record figure of 101.2%v. A record high gross Kerosene yield of 25.5%v was also achieved.

The Laboratory has continued to strive for excellence and one of the highlights of the year was receiving the prestigious Air BP Aflas "2007 Best Performing Laboratory Award" in August 2008. The award recognises accuracy and precision in laboratories testing Aviation Turbine Fuel. Around 50 laboratories competed worldwide.

This work is critical to the quality of Bapco's export products, and one reason why the highest levels of customer service have been maintained. Cornerstone of this success is Bapco's quality management system, ISO9001:2000, which is assessed and audited twice-yearly by inspectors from the British Standards Institution (BSi).

Safeguarding the mechanical integrity of our assets, the percentage of scheduled equipment inspections completed on time reached 100% in 2008. The On-Stream Factor for the whole year was 93.66%, Operational Availability was 97.48% and Mechanical Availability was 98.43%.

The careful planning, organising and execution of major T&I's and shutdowns is crucial to overall production levels. Of the two largest undertaken during the year, on 5VDU and 4A CDU, the latter was five days shorter than past durations, and successfully combined normal T&I work, investment projects, major asbestos removal and asset preservation work.

Tank repairs involved work on 28 tanks of different sizes and at various stages of repair during the year. Following best practice, new aluminium dome roofs will be installed on four tanks during 2009.

A view of the control room at the LSDP where operatorsensure maximum yields from diesel, naptha and kerosene.


SINGAPORESingapore is one of the major refining centres in the world, and is the main recipient of Abu Safah crude. This crude is a good feedstock for those refineries capable of running heavier crudes.

Photo: A detail of a bronze hanging decoration of a dragon in Singapore.


Better storage,faster loading

Bapco's storage tanks at the Refinery and Sitra have a capacity of around 14 million barrels. Exports travel along sea lines to the six-berth wharf from where 618 vessels transported product to 40 countries world-wide in 2008.In April the Ships Inspection Report (SIRE) was successfully implemented. The program database is used by Oil Storage & Export Marine Operations Section as a primary tool to screen all ships prior to chartering.The main objective is to avoid the chartering of sub-standard ships which could endanger the marine environment and Bapco loading facilities.

To segregate the ultra-low sulphur (10ppm) diesel from the higher sulphur diesel grades and so avoid contamination, a new sea line was laid to the Wharf T-Head. In January 2009 new pumps will be

commissioned allowing a loading rate of 15,000 barrels per hour for both grades of diesel.

The marketing terminal at Sitra distributed a total of 1,440 million litres of product to the local market in 2008. Unleaded gasoline amounted to 761 million litres, diesel 494 million litres, and LPG 82 million litres. Sales of asphalt amounted to 56 million litres while kerosene sales were 33 million litres.

Sales of aviation jet fuel, which travels by pipeline to Bahrain International Airport, amounted to 223 million US gallons.

Technological advances for business advantageTo maintain control of costs and optimise operations Bapco is constantly looking to apply technological advances in all areas of the Company.

Significant progress was made on Bapco's e-procurement programme, with a successful pilot project leading to preparation for full-scale implementation. This is in direct support of Bahrain's e-Government Initiative. The Company also made significant progress along the road to public tendering, despite the complex nature of many of its contracts. Both these will assist the Company's efforts to achieve greater transparency.

• On the production side, Bapco is looking at enhanced oil recovery (EOR) technology as a means to sustain oil and gas production. • In the tank storage area, the Company has begun implementation of advanced gauging techniques using SAAB radar gauging technology, providing accuracy to +/-0.4mm.• Near Infra-Red analysers now control gasoline blending to reduce product giveaway and enhance profits.• The use of "smart fuel cards" to streamline cash collection system has been expanded and the Company has embarked on an ambitious plan to upgrade and modernise service stations.

In the worldwide study conducted by Solomon Associates - the world leader in benchmarking and performance measurement - Bapco has achieved a respectable overall 2nd quartile position in Refinery Advanced Process Control and Automation analysis. Bapco was also commended as a world leader in the testing of Safety Instrumented Systems (SIS). This is the first time Bapco has occupied such a lead position in a Solomon survey.

Bapco continues to upgrade its network of service stations to provide the best customer service.


NETHERLANDSKnown also as Holland, the Netherlands has been an important Bapco customer for jet fuel for commercial aircraft, and kerosene for conversion into jet fuel. Now Bapco is looking to expand its European sales with strong marketing of its ultra-low sulphur diesel.

Photo: Windmills are an essential part of the Dutch landscape. They are used primarily to irrigate canals or dykes, and help prevent flooding by pumping water through the land drainage system.


Personal developmentfor a future of promise

Bapco is a vibrant and energetic company playing a key role in the development of young Bahrainis. Training in craft and technical skills has been at the centre of this activity inside the Company, and outside through the Skills for the Workplace programme which was organised in collaboration with the Ministry of Labour.The two-year programme, which concluded in May 2008, fulfilled the Company’s vision of creating a pool of talented Bahraini technicians to meet the ever-growing needs of the local industries. A total of 618 young Bahrainis graduated through this programme with about 200 being awarded internationally recognised skill competency certificates.

Developing young graduates to become the managers of the future has been a pressing concern for the Company. Among these, 87 are benefiting from indvidual development programmes, which include special courses, mentoring and montoring. More than 20 supervisory development courses in 18 different subjects were conducted for 275 supervisors during 2008. The Company is now accredited as an awarding centre for the Institute of Leadership and Management (ILM) qualifications. The first group of 12 employees were awarded their ILM certificates in March 2008, one of whom later received an award at the international ILM Learner of the Year award ceremony in London. A second group is progressing well towards completion of their course of study, which concludes in the first quarter of 2009.

Bapco also supports other major leadership and mentoring programmes, such as the prestigious Crown Prince International Scholarship Programme, by providing funding for scholarships, mentors and on-the-job training opportunities.In 2008 Bapco had 33 employees on scholarship awards, with the overall sponsorship and scholarship programmes encompassing more than 300 students in Bahrain and overseas, with an emphasis on chemical and petroleum engineer--ing disciplines.

But nowhere is Bapco’s commitment to personal development more evident than in its female workforce. To mark Bahraini Women’s Day on December 1, the Company held a celebratory event attended by more than 250 Bahraini female employees - about 9% of the total Bahraini workforce at Bapco. During the year two women were promoted to superintendent positions and one to manager, while another 29 were promoted.

A new award - the Chief Executive Award for Excellence - to recognise employees who live and champion Bapco’s corporate values and demonstrate outstanding initiative was launched during the year. Three awards are made each quarter. Salary allowances and employee benefits were substantially increased to maintain the competitiveness of Bapco’s employment package.

Bapco maintained a strong relationship with its employees through the trade union, and the overall spirit of cooperation was amicable. This has resulted in constructive resolution of individual and company-wide issues through regular negotiation meetings.


SOUTH KOREAShipments of naphtha are sent to South Korea where they are used as feedstock for the manufacture of petrochemicals, and ultimately into the making of a huge range of products including plastics, synthetic yarns and silks.

Photo: Children giving a traditional drum dance performance. The drum dance is one of the most important dances in South Korea, with adult dancers sometimes holding drums much taller than themselves.


Protecting the environment:progress recognised

ISO 14001:2004 certificationOne of the most significant achievements of 2008 was to gain certification to the internationally recognised environmental management standard ISO 14001:2004.

An independent two-stage audit was carried out by Bureau Veritas (BV) during November and December 2008 to assess Bapco's environmental management system (EMS) against the requirements of the ISO 14001:2004 standard. BV stated that Bapco's commitment towards environmental protection is clearly evident in its compliance plan and actions to raise environmental awareness amongst employees, contractors and the community at large.

Refinery Gas Desulphurisation Project (RGDP)This environmental project with an estimated cost of US$151 million, will significantly reduce air emissions and improve effluent water quality at the Bapco Refinery to meet the latest environmental regulations. The new facilities include a sulphur recovery unit, liquid sulphur degassing, tail gas treating unit, sour water stripping and amine treating units.During 2008 the project was completed mechanically and made ready for commissioning in November and December. By the end of the year RGDP had achieved almost 4 million employee-hours without a lost-time accident, a significant achievement for such a complex construction project. It is expected that all the units will be in operation during the first quarter of 2009.2008 also saw the first full year's operation of the cleaner and larger sulphur handling facility. The amount of sulphur produced as a by-product will increase from around 70,000 metric tonnes to 150,000 tonnes per year when the combined output of the LSDP and RGDP is available.

Bapco Green School AwardAn innovative award scheme to reward public secondary schools in Bahrain for environmental projects undertaken by students was launched by Bapco in the 2004/2005 academic year. The scheme, in association with the Ministry of Education, encourages participation in conservation projects such as saving water, energy efficiency and recycling.

Bapco’s newest project, the Refinery Gas Desulphurisation Plant, is the most important environmental project ever undertaken by the Company.


EHS WeekMore than 20,000 people attended the Family Day at the Bahrain International Circuit, part of Bapco’s Environment, Health and Safety (EHS) Week. The aim is to increase awareness among employees and their families of many environmental, health and safety issues through fun activities such as competitions, quizzes, entertaining exhibits and educational giveaways. The theme for the 2008 EHS Week was “Beyond Compliance”, reflecting Bapco’s commitment to help its employees and contractors take its strong EHS values into their homes and communities.

Exceptional health and safety recordIn July 2008, Bapco achieved the British Safety Council (BSC) five-star rating in health and safety management. Bapco is the first company in Bahrain to achieve such a prestigious rating, and allows the Company to be nominated for an international Sword of Honour award.

Once again Bapco’s safety record was exceptional:

• The Company achieved three million employee-hours in July and 4.9 million employee-hours in November, worked without a lost-time accident. • An Operational Excellence Audit by Chevron and two OHSAS audits were successfully completed in 2008.• Following the prestigious Robert Campbell Award in 2007, Bapco has been chosen as a case study by the University of Pennsylvania (Wharton Business School).

As part of the Company’s continued concern for employees’ well-being, a health survey has been conducted, and a new Health Promotion Programme established. Health awareness sessions have commenced; campaigns to help employees give up smoking, and to lose weight, are planned for 2009.The hospital in Awali and Clinic in the Refinery continued to provide exemplary service.

The Chief Executive of Bapco at the flag-raising ceremony to mark Sitra Girls School success in winning the 2008 Green School Award.

Health and safety are the prime concern in all Bapco’s activities. Here a regular exercise is

being held to practice the rescue of workers.


US$2m support forthe community


Besides contributing more than 70% of the national economy and being the largest industry employer in Bahrain, Bapco also leads the way in contributing to the social and cultural life of Bahrain, spending US$2 million in 2008 in donations and sponsorships to support and promote a wide variety of causes and events.

The company is one of the main sponsors of the Bahrain International Circuit which hosts the annual Formula One Grand Prix; Bapco also contributes to educational organisations, sports clubs and events, charity funds, social and cultural clubs, and a host of professional and specialised exhibitions and conferences.

Bapco was one of the first companies to support the Bahrain Injaz project when it was launched in 2006 and continues to be a strong supporter, contributing financially and providing employees as volunteers.

Aiming for long-term sustainable growthIn the past few years, the world economic climate became fraught with uncertainty as financial markets, political unrest, and volatile commodity and oil prices made business planning all the more difficult. This was confirmed by the unprecedented situation the oil industry now faces following the near-collapse of the global banking system and rapid economic recession.Unprecedented situation the oil industry now faces following the near-collapse of the global banking system and rapid economic recession.

Today the Enterprise Risk Management System is even more crucial as the Company seeks to map out scenarios, assess risks and put contingency plans in place to protect critical business processes, and to limit expenditure, secure markets and ensure appropriate levels of funding.

Bapco will continue to implement its strategies by concentrating on the long-term sustainable growth of both upstream and downstream operations with short-term price rises playing a relatively minor role in the executive decision-making.Despite the world economic situation, Bapco will press ahead with its business philosophy to seek out new areas of growth and diversification, so that when the global upturn comes we will be better placed to take advantage of new opportunities.

In all its endeavours the aim will be to achieve operational excellence: for Bapco, that means a safe work environment, empowered employees, quality products, and satisfied customers.

CHINAChina is one of Bapco’s most distant customers. Such distance affects the competitiveness of Bapco products, and also impacts on profit margins. Nevertheless, Bapco has been successful in shipping crude to the Far East, China and Australia.

Photo: Aiwan Pavilion in Hunan Province was built in a maple wood in 1792, and was a favourite place of Mao Zedong, who wrote a poem which was inscribed in a tablet there in the 1950s.

Crude Sales (Abu Safah)

38.6%

12.7%10.6%

10.4%

8.3%

6.9%

4.0%3.3% 5.2%

Singapore

Japan

Australia

China

Malaysia

Korea

India

Kenya

Others

Annual Review 2008 22 - 23Annual Review 2008


The Board Committeeدارة بابكـــو اللـجنـــــة العليـــا الإ

Executive Managementدارة الــــــتنـــــفـيــــــذيـــة االإ

H.E. Dr. Abdul-Hussain bin Ali Mirza - Chairman

Abdulkarim Al-Sayed - Chief Executive

Faisal Al-MahroosDeputy Chief Executive

(Special Assignment)

Dr. Eion TurnbullDeputy Chief ExecutiveRefining and Marketing

Adel Al-Moayyed Acting Deputy Chief Executive

Exploration and Production

The Board of Directors of Bapco pays tribute to the many years of dedication to the Company by the following senior management who left office during 2008:

Abdul-Rahman Abdulla, Ghuloom Al-Ansari, Abdullatif Ismail

�صعـــادة الدكتور عبداحل�صيـــن بن علي مـــريزا

دارة بابكو رئي�س اللجنة العليا الإ

عبـــدالـــكــرمي ال�صــيـــد - الرئيــ�س التــنـفيـذي

عادل املوؤيد

نائب الرئي�س التنفيذي

لال�ستك�ساف واالنتاج بالوكالة

الدكتور اإيون ترينبل


للتكرير والت�سويق

في�صل املحرو�س


)مهمة خا�سة(

غلوم وال�سيد عبداهلل عبدالرحمن ال�سيد من لكل والتقدير ال�سكر بخال�س تتقدم اأن بابكو دارة الإ العليا اللجنة ي�سر

دارة التنفيذية العليا الذين تركوا العمل بال�سركة اإبان عام 2008، واأن ن�ساري وال�سيد عبداللطيف اإ�سماعيل - اأع�ساء االإ االأ

ت�سيد بخدمتهم الطويلة واإخال�سهم وتفانيهم يف دعم م�سرية بابكو طيلة ال�سنوات املا�سية.

Annual Review 2008

H.E. Rasheed Mohammed Al-Me’araj

Dr. Shaikh Mohammed bin Khalifa Al-Khalifa

Abdul Rahman Abdul Hussain Jawahery

Ahmed Saleh Al-Noaimi

A. Rahman A. RahimGeneral Manager

Production and Drilling

Essa Al-AnsariGeneral Manager

Engineering

Hussain Al-AnsariGeneral Manager

Maintenance

Hassan JaffarGeneral Manager

Refining (Outgoing)

Nowrooz FarazGeneral Manager

Marketing

Anwar KhalafGeneral ManagerExploration and

Petroleum Engineering

Mahmood Al-AlawiGeneral Manager

Finance and IT

Mohamed Al-JameaGeneral Manager

HR and Administration

Dr. Dawood V. NassifGeneral Manager

Strategy and BusinessDevelopment

الدكتور داود ن�صيف

مدير عام اال�سرتاتيجية

وتطوير �سئون العمل

�صعادة ر�صيد حممد املعراج الدكتور ال�صيخ حممد بن خليفة

اآل خليفة

عبدالرحمن

عبداحل�صني جواهري

اأحمد �صالح النعيمي

عبدالرحمن عبدالرحيم

نتاج واحلفر مدير عام االإ

ن�صاري عي�صى الأ

مدير عام ال�سئون

الهند�سية

حممود العلوي

مدير عام ال�سئون

املالية وتقنية املعلومات

ح�صن جعفر

مدير عام التكرير)ال�سابق(

نوروز فراز

مدير عام الت�سويق

اأنور خلف

مدير عام اال�ستك�ساف

وهند�سة البرتول

ن�صاري ح�صني الأ

مدير عام ال�سيانة

حممد اجلامع

مدير عام املوارد الب�سرية

دارية وال�سئون االإ

Ebrahim TalibGeneral Manager

Refining (Incoming)

إبراهيم طالب ا

مدير عام التكرير)احلايل(

His Highness Shaikh Salman - The Bahrain Petroleum ... Highness Shaikh Salman bin Hamad Al-khalifa...

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