Thursday, September 11, 2014
Wednesday, September 10, 2014
Iraq renews attempts to seize Kurdish 'ghost ship' oil tanker in US court
Iraq has refiled in US court in an attempt to control a Kurdish crude oil tanker that has been stationed around 60 miles off Texas since late July. The refiling comes days after the court said it lacked jurisdiction to seize the cargo.
Iraq has urged a US district court to intervene and take control of the United Kalavrvta tanker’s cargo until the dispute is resolved, according to Reuters, claiming that the US court does have jurisdiction given the case involves business conducted in the United States.
"This Court has subject matter jurisdiction over the claims against John Doe Buyer," Iraq said in its motion. US District Court Judge Gray Miller invited Iraq to replead the case.
The Iraqi government - which says it has sole rights to export crude oil in the country - has deemed the shipment of Kurdish crude oil illegal. Baghdad filed a lawsuit in the US in June, preventing any purchaser from unloading the Kurdish shipment.
The Kurdistan Regional Government has yet to say if it owns the tanker, according to Iraq. Kurds have argued that the sale of their crude is essential to their dreams of an independent Kurdistan – while the US State Department has publicly backed Baghdad’s stance.
When Iraq’s government initially filed the lawsuit over United Kalavrvta, US District Judge Nancy K. Johnson ordered the seizure of the tanker’s $100 million payload, but only if the tanker entered the territorial waters of the US.
On August 28, the US Coast Guard said its AIS ship tracking system reported having no known position for the United Kalavrvta. It is alleged that the Kurd tanker switched off its transponder to avoid detection.
The tanker now sits off the coast of Texas awaiting the results of litigation.
Kurdish oil tankers have previously switched off their electronic transponders, essentially making their movements impossible to track.
Last month, a Kurdish tanker carrying crude disappeared from satellite tracking north of Egypt’s Sinai, only to reappear empty two days later near Israel. In July, a tanker offloaded part of its cargo of Kurdish crude onto another ship in the South China Sea.
As recently as June, Iraq’s central government made an attempt at barring Kurdish oil sales but it was ultimately rejected by Iraq’s Supreme Court.
Total books VLCC with storage option as crude oil falls below $100
http://www.platts.com/latest-news/shipping/singapore/total-books-vlcc-with-storage-option-as-crude-26876574
Oil traders are aggressively looking to hire VLCCs for storage purpose due to weak demand and falling prices, with French oil major Total reportedly fixing a VLCC with a storage option in the Persian Gulf, participants tracking the supertanker segment said Tuesday.
The company has taken the Xin Yong Yang at 43 Worldscale points for September 25 loading on the Persian Gulf to East route, basis 270,000 mt, with a 10-to-30 days storage option at $37,500/day, owners, brokers and charterers said.
"We heard that the storage will be at Fujairah," said a VLCC broker in Tokyo. Charterers think crude price will be higher later, the broker said.
Total executives could not be immediately reached for comment.
Another broker in Singapore said, "There is plenty of crude floating around but this is done more in smaller ships."
ICE Brent crude futures traded below $100/b Tuesday due to oversupply as Libyan exports and the upcoming maintenance runs by some refineries weighed on prices.
Weak crude demand has also brought down the number of VLCC fixtures.
One of the reasons driving demand for ships for storage is that there have been fewer loadings this month from the Persian Gulf and the Red Sea, the same Singapore-based broker said.
So far, 79 VLCC fixtures for Persian Gulf and Red Sea loading are estimated done for September, including 67 for the East, four for the West and eight for optional voyages, according to brokers.
Overall fixtures are estimated at 123 for August, including 17 for destinations in the West and 106 for the East.
Though there are still outstanding cargoes for loading in the third decade of September that are yet to be covered with tonnage, market participants expect fixtures to be lower than August.
Weaker demand has dragged down crude prices, leaving suppliers with no option but to hold back their inventories and hope for higher rates in the short term.
Storage of crude in landed tanks is not always available at a preferable location and for exactly the duration a company wants to hold the volume.
In contrast, chartering of ships for storage is relatively flexible in terms of location and duration.
"One possibility is that they [Total] will sell this cargo if they get the price [they are aiming at] and then top up the ship with another cargo," one of the brokers said.
Recently, an ultra large crude carrier, the 442,000 dwt, 2002 built TI Europe, was taken on a six-month time charter by Unipec at a daily rate of $25,600.
There is an option to extend the time charter period by another six months at $28,600/day.
Such options impart flexibility in the trade of floating crude.
Shipowners are also hoping that the trend of holding crude in floating storage will pick up.
"If the price of crude continues to fall, there will be more opportunities for ships being taken for storage," said a Singapore-based source with a VLCC owner.
Owners said that a short-term storage deal can be compared with a round-voyage from Persian Gulf to China, which will take almost two months.
If the daily earnings are attractive, owners will give the ship for storage for the same duration, they said.
Nevertheless, the current forward structure of crude prices is not really an attractive storage opportunity because the contango is not deep enough for storage economics to work well, said an analyst with a North Asian refiner.
"This push into storage is not because there is a contango. [Instead] it is because there is [less] demand, which has led to a contango," he said.
The spread between the front-month and three-month forward Brent crude has declined below $10/mt from $12/mt nearly a month earlier.
Time charter rates for VLCCs are also on the rise in anticipation of more demand, though not necessarily for storage.
Earlier this year, the 2010-built, 321,000 dwt Blue Topaz was taken for a 12-month time charter by Koch at a daily rate of $22,000, according to brokers.
Market participants said time charter rates for the same duration would now be above $25,000/day, perhaps even close to $28,000/day.
--Sameer C. Mohindru, sameer.mohindru@platts.com
--Edited by Alisdair Bowles, alisdair.bowles@platts.com
Government To Restructure Tema Oil Refinery
Energy Minister, Mr Emmanual Armah-Kofi Buah, addresses Meet-the-Press series in Accra.
Government is finalizing a business plan and a commercial framework to restructure the Tema Oil Refinery (TOR) to make it a world class facility.
As a result, a meeting involving all stakeholders, including the Ministry of Justice and Attorney General and the Ministry of Finance and Economic Planning is scheduled for mid-September to discuss shareholders agreement and government support.
The meeting would also discuss a Consent Agreement and other related Off-Taker Agreements, Mr Emmanuel Armah-Kofi Buah, Minister of Energy and Petroleum, said on Tuesday.
The Minister, who took his turn at the Meet-The-Press series in Accra, said timelines for negotiations and execution of documents, including submission to Parliament and Cabinet, were expected in the last quarter of the year.
“However, as a temporary measure, the management of TOR is negotiating with international and local financial institutions for funding to execute their annual mandatory maintenance in October this year,” he said.
The financial assistance being sought, according to the Minister, would also enable TOR to fund the supply of crude oil pending the completion of negotiation of all Project Agreements, Government Consent and Support Agreements.
Mr Buah said a number of measures had also been established to ensure that the Bulk Oil Storage and Transportation Limited (BOST) performed its core mandate of holding strategic reserve stocks, infrastructure development for storage and transportation of petroleum products.
He said among these measures, BOST had engaged TSL Logistics Limited on a pilot basis to efficiently manage and operate its depots and to assume liabilities related to stock losses.
“Inter-depot transfer of products has restarted. This will eventually lead to full resumption of the Zonalisation Policy, a policy that guarantees efficient, cheaper and uniform pricing and distribution of petroleum products in the country,” the Minister said.
Mr Buah said BOST was earnestly working on the formal handover of its barges and tugboats to Volta Lake Transport Companies to enable consistent and cheaper transportation of petroleum products through the Volta Lake.
According to him, BOST, in collaboration with the Ministry of Energy and Petroleum, had commenced negotiations with Burkina-Faso on the completion of the Bolgatanga-Bingo (Burkina-Faso) pipeline, which would generate huge foreign exchange revenue for the state through the supply of petroleum products to Burkina Faso, Mali and Niger.
The Minister gave a rundown of all the various activities that were on-going under the Ministry, which includes issues in the Power Sub-sector, Renewable and Alternative energy as well as local content in petroleum activities.
Tuesday, September 9, 2014
Brent drops below $100 as ample supply weighs
A man pumps gasoline at a service station in Caracas August 7, 2014.
Credit: Reuters/Jorge Silva/Files
By Keith Wallis
(Reuters) - Brent crude eased for a fourth straight session on Tuesday, with prices holding near a 16-month trough below $100 a barrel, amid concerns of ample global supply and slower-than-expected growth in the world's top oil consumers.
Continued output from strife-torn countries such as Iraq and Libya and the shale oil boom in the United States have lessened supply side risks, while slowing growth in western economies and China have raised demand concerns, said Tetsu Emori, a commodity fund manager at Japan's Astmax Co Ltd.
Brent was trading down 33 cents at $99.87 as of 0657 GMT after ending the previous session 62 cents lower. On Monday, prices slid below $100 for the first time in almost 15 months and hit a low of $99.36 - the weakest since May 1, 2013.
U.S. crude was 14 cents higher at $92.80, snapping a three-day losing streak, after falling 63 cents on Monday.
"I expect Brent will be traded between $99-$100 today. Prices below $100 a barrel will be a good opportunity for traders to buy for storage purposes," said Yusuke Seta, a commodity sales manager at Tokyo's Newedge Japan. "The market will try to test the $100 per barrel support line again."
However, hopes for a cut in output by the Organization of the Petroleum Exporting Countries kept a floor under oil prices.
"Oil at below a $100 a barrel is a little bit risky in the current market - $100 per barrel is really a central point for oil countries," Emori said.
Expectations of an OPEC output cut come as Gulf Arab oil ministers gather on Thursday in Kuwait for an annual meeting that could include discussion about price levels.
Top OPEC exporter Saudi Arabia and other OPEC members favour oil at $100 and prices are under pressure due to ample supply even as some OPEC delegates see the lower prices as short-lived.
Astmax's Emori said there was potential for Brent to trade at around $120 per barrel by the end of this year, while U.S. crude could hover around $110-$115 per barrel, on rising winter demand and possible geopolitical concerns.
US CRUDE STOCKS EYED
The market is now waiting for U.S. crude inventory data for clues on the outlook for demand in the world's top oil consumer.
U.S. crude oil stocks likely fell by 1.5 million barrels in the week to Sept. 5, according to a preliminary Reuters analysts' survey on Monday.
The poll was released ahead of weekly inventory reports from industry group the American Petroleum Institute (API) on Tuesday and from the U.S. Department of Energy's Energy Information Administration (EIA) on Wednesday.
Investors were also eyeing developments in the Middle East.
Iraq's parliament approved a new government headed by Prime Minister Haider al-Abadi on Monday in a move to save Iraq from collapse and in what U.S. Secretary of State John Kerry said was a "major milestone".
Libya's oil output has risen to 740,000 barrels per day, the National Oil Corp said on Monday, an increase from 725,000 bpd that has been fuelled by the reopening of several oil export ports.
There was speculation Libyan output could climb further by the end of this month, boosting supplies and putting further pressure on oil prices, Newedge's Seta said.
Elsewhere, the European Union adopted new sanctions on Monday against Russia over the Ukraine crisis, but enforcement will be delayed while an assessment is being done on whether a ceasefire in Ukraine is holding. The measures will target the ability of Russia's top oil producers to raise capital in Europe.
(Editing by Muralikumar Anantharaman and Himani Sarkar)
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