Abu Dhabi lifts destination restrictions on crude

Abu Dhabi's state-owned Adnoc will remove destination restrictions on all its crude export grades from June, allowing them to be freely traded for the first time. It has also given a projection for forward availability of its key Murban grade, as it prepares to launch its futures contract.

Adnoc said today that restrictions will be removed on Murban in the first traded month of the new futures contract, which is being launched by the Ice exchange on 29 March, and on the Upper Zakum, Das and Umm Lulu grades.

"By lifting destination restrictions, Adnoc crude grades will become more attractive to global customers and the wider trading community, the firm's downstream, marketing and trading director Khaled Salmeen said. More than 90pc of Murban exports go to Asia-Pacific.

Murban futures will be physically delivered two months ahead of the pricing month. The June contract, the first to be launched on Ice, expires at the end of April for physical delivery in June, Adnoc said.

The contract will set Abu Dhabi's monthly crude official selling price (OSP) from June, the first month of lifting for the new contract. Upper Zakum, Das and Umm Lulu will be priced at a differential to the Murban futures price. These prices will be announced one month before the month the cargoes are due to load, and the Murban official price will be known two months before the month of cargo loading.

Adnoc currently announces OSPs for all its crudes one month before the month that the cargoes are due to load, usually within the first week of each month. It sets the Murban OSP at a differential to the monthly average of Dubai crude assessments published by price reporting agency Platts.

To improve export visibility, Adnoc has issued a first 12-month rolling forecast of the amount of Murban available. It forecasts 1.034mn b/d of Murban for export from Fujairah and Jebel Dhanna in April, 1.001mn b/d in May and 1.040mn b/d in June.

Abu Dhabi can produce up to 2mn b/d of light, sour Murban, just under half of its 4.2mn b/d overall capacity, with its largest producing onshore assets — Bu Hasa and the South East group of fields — contributing 650,000 b/d and 630,000 b/d respectively. It has plans to boost capacity to 5mn b/d by 2030.

Adnoc today also said that China's private-sector Rongsheng Petrochemical and state-run trading firm Unipec will explore using the Murban futures contract.

By Adal Mirza