Monday, August 29, 2011

India Refiners Said to Skip Oil Purchases on Nigeria Disruptions


http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2011/08/26/bloomberg1376-LQIRNP0UQVI901-3PGOUC91QBKM7I59RB20L695KI.DTL

(Bloomberg) -- Two Indian refiners skipped crude purchases after Royal Dutch Shell Plc said "pipeline incidents" forced it to suspend some Nigerian crude export obligations, driving up prices, according to four traders who participate in the market.

Mangalore Refinery & Petrochemicals Ltd., a unit of India's largest explorer, and Bharat Petroleum Corp., the country's second-largest state-run oil refiner, canceled tenders seeking crude for October because offers were too high, said the traders who declined to be identified because they aren't authorized to speak with the media. Two calls made to Mangalore Refinery's headquarters in southern India weren't answered. A call to Mumbai-based Bharat Petroleum's media relations department also wasn't returned.

Shell's Nigerian unit declared force majeure on its Bonny Light crude oil exports after "several pipeline incidents," the company said in an e-mailed statement Aug. 23. The force majeure, a legal clause that allows the company to miss scheduled deliveries for circumstances beyond its control, covers shipments for the rest of August through October, the company said.

The premium of benchmark Nigerian Qua Iboe crude oil to Dated Brent has jumped more than $1 to $4.03 a barrel since the force majeure came into effect, according to data compiled by Bloomberg. Bonny Light's premium has widened 80 cents to $3.72 in the period, the Bloomberg data show.

Asian oil refiners plan to reduce West African crude imports next month by 18 percent to 41 cargoes, nine fewer than August, according to a survey of seven traders involved in the transactions.

--With assistance from Christian Schmollinger in Singapore. Editors: Alexander Kwiatkowski, Justin Carrigan

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