Bloomberg News

Vitol Sells Forties Crude; Shell Lifts Bonny Light Force Majeure

February 01, 2012

Jan. 31 (Bloomberg) -- Vitol Group sold a cargo of North Sea Forties at a lower price on a ship-to-ship basis, the first of this type of transfer in a year. Royal Dutch Shell Plc failed to sell Russian Urals crude in northwest Europe.

Shell said it lifted force majeure, a legal clause allowing it to miss shipments, on Bonny Light crude loadings in Nigeria yesterday after completing repairs to the Nembe Creek Trunkline, which shut last month following leaks.

North Sea

Vitol sold Forties to Trafigura Beheer BV for Feb. 14 to Feb. 16 ship-to-ship transfer from the Eagle Tampa at 15 cents a barrel less than Dated Brent, according to a Bloomberg survey of traders monitoring the Platts trading window. Yesterday, Vitol sold at a discount of 10 cents to the benchmark.

Trafigura didn’t find a buyer for a shipment for Feb. 13 to Feb. 15 loading at 10 cents more than Dated Brent, the survey showed.

Morgan Stanley failed to buy Forties for Feb. 19 to Feb. 23 at 15 cents less than Dated Brent, and Hess Energy Trading Co. didn’t manage to buy at parity to the benchmark for Feb. 25 to Feb. 27, according to the survey.

Reported North Sea trading typically occurs during the Platts window, which ends at 4:30 p.m. London time. Before the session, Forties loading in 10 to 25 days was 13 cents a barrel less than Dated Brent, down from a discount of 24 cents yesterday, according to data compiled by Bloomberg.

Brent for March settlement traded at $111.10 a barrel on the London-based ICE Futures Europe exchange at the close of the window, up from $111.05 yesterday. The April contract was at $110.76, a discount of 34 cents to March.

BP Plc, which operates the Forties Pipeline System, plans in August to close the larger of two jetties at Hound Point in Scotland, the loading terminal for Forties.

No. 1 jetty, the quay at the terminal that handles supertankers, will shut for three weeks of repairs that month, BP said on its website. Both jetties at Hound Point will close this year for a week of repairs, the company said, without specifying when that work would start.

BP plans to install a new loading arm at the No. 2 jetty over an estimated four-month period, according to the website. Loadings will be suspended during the installation, it said, without saying when it would take place.

Three cargoes of Forties crude for loading next month were delayed by one to three days, three people with knowledge of the export program said.

The shipment with parcel number F0208 will now be exported on Feb. 11 to Feb. 13, three days later than planned, while lot F0219 was deferred by three days to Feb. 25 to Feb. 27 and the F0206 cargo was delayed by one day to Feb. 7 to Feb. 9, the people said, declining to be identified because the information is confidential.

Mediterranean/Urals

Shell failed to sell 100,000 metric tons of Urals for Feb. 16 to Feb. 20 delivery to Rotterdam at 80 cents a barrel more than Dated Brent, the survey showed. The grade was last bid at a premium of 5 cents on Jan. 27.

No bids or offers were made for Urals in the Mediterranean. The grade was at 25 cents less than Dated Brent, compared with a discount of 30 cents yesterday, according to data compiled by Bloomberg.

OAO Rosneft, Russia’s largest oil producer, awarded a Urals crude tender for seven cargoes of 100,000 tons each loading in February from the Baltic Sea port of Primorsk to Shell and BP, according to two traders.

OAO Surgutneftegas sold a 100,000-ton cargo of Urals crude via a tender to Litasco SA, the trading unit of OAO Lukoil, for loading on Feb. 10 to Feb. 11 from the Baltic Sea port of Primorsk, according to two market participants.

The company also sold two cargoes for loading Feb. 21 to Feb. 22 and Feb. 22 to Feb. 23 from Primorsk to Total SA, according to two traders involved in the region’s oil.

West Africa

Nigeria, Africa’s largest crude producer, plans to cut its daily exports for next month by 1 percent from February, according to shipping plans obtained by Bloomberg News.

Shipments will total 65.7 million barrels, or 2.12 million barrels a day, compared with 2.14 million barrels a day for next month, according to the programs.

Indian Oil Corp. issued a first tender to buy crude for loading in April, according to a document obtained by Bloomberg News. The tender closes on Feb. 1 and offers are valid until the following day, the document shows.

Qua Iboe crude was at a premium of $2.65 a barrel to Dated Brent, compared with a premium of $2.67 yesterday, data compiled by Bloomberg shows.

--Editors: Rob Verdonck, Alessandro Vitelli

To contact the reporter on this story: Sherry Su in London at lsu23@bloomberg.net

To contact the editor responsible for this story: Stephen Voss at sev@bloomberg.net


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