Arab Petroleum Investments Corp., the multilateral development bank of the Organization of Arab Petroleum Exporting Countries, has sold 12.5 percent of its stake in the Bahrain National Gas Co. (Banagas) to Kuwait-based Boubyan Petrochemical Co. "The divestment was approved recently by Apicorp's board of directors," as per the company. The Saudi government owns a 17% stake in Apicorp.
Apicorp CEO Ahmad bin Hamad Al-Nuaimi said since the time it invested in Banagas 33 years ago, the company has evolved into a highly successful leading local, regional and international company. "As a result of its continued success, we feel it is appropriate to monetize our share in Banagas by transferring it to a strategic GCC-based investor so that we can advance our plans to initiate and develop other oil and gas projects," said Al-Nuaimi. Banagas was founded by the Bahraini government (currently represented by the National Oil and Gas Holding Co.), Chevron and Apicorp in 1978 with stakes of 75%, 12.5% and 12.5% respectively.
The company's principal business comprises extracting and marketing propane, butane and naphtha, by processing associated gas from Bahrain's oil field, for the local, regional and international markets. Banagas is estimated to produce 4,720 bpd of naphtha, 1,230 bpd of butane and 1,310 bpd of propane. With more than 400 employees and a large volume of exports, Banagas plays an important role in the Bahrain national economy.
"In order to ensure a market-driven sale value for our shareholders, Apicorp implemented a highly successful three-stage auction process in which a high number of regional and international companies participated," said Al-Nuaimi. "In the end, Boubyan, a strategic regional company specialized in chemicals and petrochemicals from Kuwait, won with the most competitive bid." Boubyan, established in February 1995 with the prime objective of acquiring a 10 percent equity stake in Equate Petrochemical Co., is the largest petrochemical complex in Kuwait. It has an impressive investment portfolio in Kuwait, Oman and Saudi Arabia as well as across the rest of the world.
Banagas is Boubyan's first direct investment in Bahrain. Boubyan was listed on the Kuwait Stock Exchange in 1997, and its shares continue to perform well on the Kuwait Stock Exchange Index.
Boubyan Deputy Chairman Dabbous Mubarak Al-Dabbous said: "This investment represents the reinforcement of Boubyan's commitment to its strategy of making strategic direct investments in successful ventures in the chemical, petrochemical, and oil and gas sectors, especially in the hydrocarbon-rich GCC region." On the sale of APICORP shares, Banagas General Manager Shaikh Mohamed bin Khalifa Al-Khalifa said: "We have enjoyed working with Apicorp as a strategic partner for the last 33 years. We very much appreciate and commend the strong business relationship and team spirit that we have had with Apicorp's top management and board of directors, and wish them every success in implementing their five-year investment strategy. We also welcome Boubyan as a new strategic partner and look forward to working with them toward achieving future goals and objectives of Banagas."
Apicorp has had a strong presence in Bahrain since first investing in Banagas in 1978. "Over the years, our commitment to Bahrain has increased in areas of project finance and financial advisory services for oil and gas projects," said Al-Nuaimi. "In 2006, Apicorp established a Bahrain banking unit to support the growth and diversification of Apicorp's sources of funding. We fully expect Apicorp to continue to assist in developing additional oil and gas projects important to Bahrain, either through equity, project finance, or financial advisory services."