PETRONAS plans crude price formula change in 2011

September 26, 2010

Isn’t it ironic that Tapis field is not operated by PETRONAS? It’s still in the hands of a foreign multi-national.

From the Malaysian Insider, dateline 2010-09-23:

Malaysian state oil firm PETRONAS is reviewing its crude price formula, paving way for a change for the first time in eight years, industry sources said today.

The move comes after two other Southeast Asian producers Vietnam and Indonesia said they planned to review their price formulae, abandoning volatile local benchmarks in favour of European bellwether Brent to price their crudes.

Local markers suffer from low liquidity due to production decline at mature fields, with prices frequently diverging from global benchmarks, traders and analysts had said.

PETRONAS has been using 100 percent Tapis prices from the Asian Petroleum Price Index (APPI) since 2002.

From Reuters: Sept Tapis climbs on gas oil strength

August 7, 2010

Dateline 2010-07-29:

Prices of Malaysian Tapis crude climbed on Thursday reflecting market-wide support for distillate-rich grades in Asia-Pacific.

September Tapis cargoes were heard to have traded at premiums of about $4.10 to the Tapis APPI, a trader said, up from about $3.70 for lots exchanged earlier in the month.

The shutdown of Taiwan Formosa Petrochemical Corp’s 540,000 barrel per day (bpd) refinery also gave some support to distillate-rich grades in the region, some traders said.

Refiners with no upgrading capacity were looking for high-quality grades such as Tapis to increase fuel output and compensate for the shortfall resulting from the Formosa closure

Tapis Crude Prices

May 25, 2010

From this article, it seems that our Malaysian brand of Tapis crude was worth a lot lately:

The highest average price was observed on the Malaysian oil Tapis last week. Its average sport price hit $84.01 per barrel, which is less by $4.45 compared to the previous week. This type is used as a reference for the oil-producing zone of the Far East. Tapis’s density is 45.5-degrees API with a 0.1-percent sulfur content.