In the middle of the Bahrain's desert, the "Shajarat-al-Hayat", or "Tree of Life", has stood tall for over four centuries. The tree has thrived in the harshest of environments, against all odds, in a place where some say the Garden of Eden once stood. The 10-metre-tall natural wonder stands on a 25-foot-high sand hill. Locals believe Enki, the mythical God of water, granted the tree its longevity. It is a symbol of extraordinary resiliency for all Bahrainis, one that its energy sector is looking to emulate.
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Located in the Arabian Gulf off the coast of Saudi Arabia, Bahrain is in the midst of diversifying its predominantly oil and gas-driven economy. Significant capital has been injected into a wide array of economic activity, including a new fintech hub, Bahrain Fintech Bay. A $32 billion infrastructure investment pipeline seeks to revamp the Kingdom of Bahrain's infrastructure, airport capacity and expand and modernize the Bahrain Petroleum Company refinery. As Bahrain puts its ambitious economic development plans into practice, it has opened up its upstream sector, allowing private operators full ownership of oil and gas drilling activities, provided they have an exploration and production agreement with the government. With energy at the heart of its economy, Bahrain is committed towards the exploitation of the country's natural resources for future generations, as well as the protection of the environment. Its main onshore field is now slowing, and produced 42,000 barrels per day in 2018, down 44% from its early 1970s peak of 75,000, according to the Oxford Institute for Energy Studies. The country also shares the Abu Safah offshore oilfield with Saudi Arabia, which had an output of 320,000 barrels per day in 2018.
However, the Kingdom discovered a game-changing 80 billion barrels of tight oil and between 10 and 20 trillion cubic feet of tight gas reserves in the Khalij-al-Bahrain basin in April 2018. These resources are expected to reach the production phase by 2023. To make the most of this sizable potential, Bahrain launched an energy fund that aims to raise $1 billion from local, regional and international investors to develop energy assets. According to the U.S. Energy Information Administration, natural gas is significantly more environmentally friendly than traditional sources of energy, like coal. Natural gas emits 117 pounds of CO2 per million Btu, while coal emits 228.6 pounds of CO2 per million Btu. It is also the most cost-effective among conventional power generation sources, with an IEA-calculated median $71/MWh Levelized Cost of Energy versus $88/MWh for coal. The discovery is all the more important to diversifying energy production considering the Kingdom's strong reliance on natural gas for power generation purposes. The International Energy Agency's latest figures show 83% of Bahrain's total energy supply is provided by natural gas. The remaining 17% by oil.
Eni's contribution to Bahrain's path towards sustainability
Much thought has gone into Bahrain's plans to diversify its economy and open up its energy sector. Its National Economic Vision 2030, first laid out in 2008, was developed with three main principles in mind: sustainability, fairness and competitiveness. The Kingdom has committed to the UN's 17 Sustainable Development Goals, which include climate action, responsible consumption and sustainable cities and communities. These goals mirror Eni's own Just Transition mission, rooted in a socially fair, environment-preserving energy transition that also support the UN's Sustainable Development Goals. Eni has also committed to the full decarbonization of all its products and processes by 2050.
“With an integrated energy model in mind, Eni signed an exploration and production sharing agreement with the Kingdom's National Oil and Gas Authority, also known as NOGA, in 2019 to pursue offshore exploration and drill exploration wells as early as 2021” said Fabrizio Bolondi, Eni’s Managing Director in Bahrain. “Eni's unique technology will make a significant contribution to this project, supporting geoscientists in the reprocessing of seismic data used in exploration. Eni's HPC5 supercomputer, located in the Green Data Center in Ferrera Erbognone, Pavia, uses a proprietary processing algorithm and has a computing power of 52 petaflops per second” said Bolondi.
But it's not only traditional energy projects that Eni is looking at in the Kingdom. “Due to its geographic location, Bahrain has a great potential for the generation of solar and wind energy, and this could be a good opportunity to contribute to the Company target of 4GW of renewable energy to be installed by 2024”.
This isn't the only piece of the energy sector that Bahrain is planning to develop in the coming years. Last year, the country signed a memorandum of understanding with Eni to further explore areas of cooperation in exploration, liquefied natural gas (LNG) and renewable energy. “With the aim of developing a more sustainable and efficient energy mix to support Bahrain's future energy needs, the Company sees additional opportunities both for natural resources and for our energy evolution business units”.
Eni's pledge on green energy and circular economy
Eni and NOGA have also pledged to work together to reach innovative solutions in favour of the circular economy, abiding by the principles reduce, reuse, and recycle. In January 2021, Eni's environmental company, Eni Rewind, and NOGA signed a memorandum of understanding to identify and promote opportunities for water, soil and landfill management and repurposing in the oil and gas industry. These would contribute to the Kingdom's progress in implementing the UN Sustainable Development Goals and support Bahrain's National Renewable Energy Action Plan (NREAP), which aims to deploy a renewable energy installed capacity of 225mw by 2025, with 50MW of wind power, 200MW of solar and 5mw of biogas. “We have 20 years of experience in remediation, water and waste resource management and regeneration, across the industry, from upstream to refining, chemical and commercial sites," said Guido Bonfedi, Head of Eni Rewind’s Technical Management and International Initiatives. “Having spent so many years managing Eni environmental activities we have a clear perspective and understanding of Bahrain's requirements and are able to offer tailor-made, rather than standardized solutions."
The circular economy model offers a new chance of innovation and integration between natural ecosystems, businesses, and waste management, according to Bonfedi. Industrial land, landfills, water and waste as resources can be reused and regenerated through state-of-the-art engineering solutions. For example, water extracted during production or remediation activities can be treated for reuse, in order to meet the needs of industrial sites. This circular system minimises the use of fresh water, while also reducing wastewater disposal or discharge. Sustainable development, as set out in the UN 2030 goals, requires pioneering changes to the way societies and businesses are organized. In this sense, the circular economy offers new opportunities towards achieving shared and responsible growth over time and is a key factor in decarbonisation strategies.
Looking toward the future
As the Kingdom invests in its energy sector, from a newly modernised refinery to the newly discovered offshore reserves to the circular economy, Eni is poised to make a significant contribution through its technological and global energy expertise. With a focus on sustainable development and the energy transition, Eni and Bahrain's partnership will bring about a mutually beneficial relationship and a new way of doing business going into the future.
The author: Esteban Pagés
Industry Analyst and Editor, Oil and Gas and Renewable Energy Industries. +400 interviews to top-level interviews with key figures in Mexico's business and government, added to thorough market analyses of each link of the industry's value chain.
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