THE MONTH IN BRIEF: Brent tops $67/bbl, Kurdistan in trouble and US exports set new record
| Published date | 01 January 2018 |
| DOI | http://doi.org/10.1111/oet.12546 |
| Date | 01 January 2018 |
THE MONTH IN BRIEF
Brent tops $67/bbl, Kurdistan in trouble and US exports set new record
Brent prompt-month futures went to $67.02/bbl on
December 26 following the loss of 400,000 bpd of North
Sea crude because of a leaking pipeline. e line in ques-
tion was the one conn ecting the Forties e ld-system with
theexportterminalatHoundPointontheBritishmain-
land, which was shut on December 11 aer a crack was
discovered. e resultant scramble to replace the miss-
ingcrudeoilhelpedtopropelpricestoatwo-yearhigh.
Brent futuresled the charge, but there was plenty of trad-
ingactivityinRussia’sUralsinEurope.
e consequences of the loss of Forties spread as far
as Asia, which has emerged as a regular buyer of the
crude in recent years, boosting the prices of two of Rus-
sia’s other crudes, Sokol and ESPO, a long with those of
several US grades. e pipeline closure was something of
a blow to Ineos, which had recently bought the line from
BP and which is also joint-owner of the 200,000 bpd
Grangemouth renery, supplied by the Forties pipeline.
In another retreat from t he North Sea for the rm, BP
relinquished its operatorship of the 1.2 mn bpd Sullom
Voe export terminal, a long with the Magnus oi leld, to
the UK independent, EnQuest.
e federal government of Iraq and the Kurdistan
Regional government (KRG) remained at loggerheads
over the export of crude oil via the KRG’s pipeline to
Ceyhan in Turkey. Baghdad continued its policy, dating
from its recapture of Kirkuk in O ctober, of not export-
ing any crude oil from Kirkuk through Kurdistan, thus
depriving the KRG of up to $400 mn in revenues during
December, putting in doubt plans to increas e the capac-
ity of the pipeline. Iraq meanwhile announced it would
send up to 60,000 bpd of Kirkuk crude to Iran, which
would export crude of an equal value on Iraq’s behalf
via the Persian Gulf. Iraq also increased its Gulf export
capacity with the opening of a 1.5 mn bpd pipeline
fromitssouthernoileldstotheal-Fawmarineexport
terminal.
e US Census Bureau announced that US crude oil
exports had cl imbed to a record 1.7 mn bpd in Octo-
ber, of which 450,000bpd went to China, making it
the top destination. Several US companies announced
plans for new pipelines to facilitate exports via the US
Gulf. Enterprise Products Partners said it would con-
vert one of its natural gas liquids (NGL) lines to crude;
a new pipeline to the coast was also announced by
EnbridgeandPhillips66alongwithafurtheroneby
MagellanMidstream.Allofthemwillincreasetakeaway
capacity from the Permian Basin in Texas, where out-
put is expected to increase by 1.9 mn bpd by 2019, to
4.4 mn bpd.
Kuwait gave notice of the launch of a new light sour
crude in 2018, with an estimated volume of 120,000 bpd.
e Emirate also announced the appointment of a new
oil minister, Bakhit al-Rashidi, Kuwait’s sixth in ve
years. Mr Rashidi was formerly with the national oil
company’s downstream unit, KuwaitNational Petroleum
Company (KNPC), and is expec ted to increase Kuwait’s
overseas ren ing capacity. e Abu Dhabi National Oil
Company (ADNOC) said that a new light, sweet crude
called Umm Lulu would be available early in 2018.
ADNOC also completed the initial public oering of
its downstream business unit, ADNOC Distribution.
SaudiArabiaapprovedrisesinthepriceofsomefuels
and electricity taris. e World Bank said it would
stop nancing most upstream oil and gas projects aer
2019.
Saudi Aramco awarded contracts for the mod-
ernization and expansion of its 305,000bpd Sasref
joint-venture renery with Shell. Kuwait Petroleum
Corporation (KPC) announced that a numbe r of
petrochemical units would be added to its proposed
615,000 bpd al-Zour downstream complex. Indian Oil
Corporation (IOC) said it wanted to build a petroleum
coke gasier as a response to a ban on the industrial
useofthefuelinpartsofIndia.PampaEnergiaagreed
to sell its 30,000 bpd Ricardo renery in Argentina to
Swiss-based trader, Tragura. Plans were announced
for a downstream oil and gas hub at Pengerang in
Malaysia, to include a 220,000bpd renery, petrochem-
ical units, oil storage and an liqueed natural gas (LNG)
terminal.
© 2018 John Wiley& Sons Ltd
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