Tuesday, April 24, 2018

Papua New Guinea's Kutubu blend crude returns to market after two-month hiatus

by Norazlina Juma'at, platts.com
April 24, 2018

Papua New Guinea's Kutubu Blend crude has returned to the spot market after a near two-month hiatus, with April, May and June-loading cargoes appearing shortly after production restarted, trade sources Tuesday said.

Production of Kutubu blend was halted on February 26 after a 7.5 magnitude earthquake led to the closure of facilities involved in the production of the grade.

Market sources said there was an April-loading cargo that had been taken by BP. The seller of the cargo is not known, but prior to the earthquake, BP was heard to have bought a cargo loading over April 23-27 from Oil Search.

In addition, ExxonMobil was heard to be offering a May-loading spot cargo of Kutubu blend last week, two traders at a trading house and an Asian refiner said.

There were also two June-loading cargoes that were heard on offer, with Oil Search heard to be the seller of one of the cargoes, another two traders said.

This could not be confirmed with Oil Search and ExxonMobil.

ExxonMobil was later heard to have withdrawn its offer for the May-loading cargo, while the June-loading cargoes were heard to have been sold, market sources said.

ExxonMobil might have been offering the May-loading cargo initially due to issues at its Singapore refinery, market sources said. The oil major typically takes its cargoes into its own system, though market sources said it occasionally offers its cargoes to the spot market.

ExxonMobil could not be reached on the status of its refinery.

Traders have been widely anticipating the return of Kutubu Blend crude to the spot market following notices of production restarting from Kutubu blend stakeholders.

Oil Search had said in a notice on April 3 that operations had resumed at its Kutubu Central Processing Facility and that it had restarted production from some of the wells at the Kutubu oil field.

This was followed by a statement from ExxonMobil on February 12 that it had restarted production from the PNG LNG project two weeks ahead of schedule. Condensates from the PNG LNG project are one of the streams that make up Kutubu Blend.

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