Caspian: Azeri Light strengthens on Mediterranean disruption

It seems that Azerbaijan is benefiting from the disruption in other oil producers, notably Libya, as well as the uncertainty caused by the situation in Egypt. Throughout August, protests and labour unrest shut down Libya's two key oil terminals, disrupting exports and helping to strengthen the differential on Azeri Light. On 1 August the price of Azeri Light hit Dated Brent plus $3.95/barrel, the highest since May 2012. Later in August BP attempted to sell a 600,000 barrel cargo at Dated Brent plus $4.75/barrel and found no buyers, however.

 

Azerbaijan's reputation for political stability has been one of its biggest strengths, and with turbulence in other key producers unlikely to end any time soon, the price of Azeri Light is likely to remain high. The government, however, is reportedly taking no chances: according to government sources, it is basing the state budget for 2014 on a price for Azeri Light of under $100/barrel (possibly $90) to serve as a buffer against price volatility. For the past two years the Economy Ministry has based the budget on oil at $100/barrel.

 

In other trading news, there were four loadings of Azeri Light, each of 600,000 barrels, scheduled at Georgia's port of Supsa in August, with five expected in September. Loadings of Azeri Light at Ceyhan were reportedly down this month, by 5,785 b/d compared to July. And ONGC Videsh sold its first cargo of Azeri-Chirag- Guneshli oil since taking over Hess's stake in the project. It sold a cargo of 600,000 barrels for loading at the end of August to Statoil for Dated Brent plus $2.70–3/barrel.

 

For more news and expert analysis about the Caspian region, please see Caspian Focus.

 

© 2013 Menas Associates

Caspian: Kulevi volumes double

The Georgian Black Sea port of Kulevi, which is majority-owned by Socar, transhipped 333,000 tons of crude oil and products in January, more than double the volume lifted in January 2010. The terminal, which came on stream in June 2008, is steadily increasing throughput as more shippers, including Tengizchevroil, use its facilities.

Among the two main users are Ocean Energy, the trading arm of Dubai-based Middle East, and Sumato Energy, which last year began exporting gas oil produced by Socar from its two Baku refineries. Rival port Batumi, which is 100 per cent owned by Kazmunaigas, is suffering a further drop in throughput as Kulevi prospers; in January, the terminal transhipped 453,000 tons of crude and products, which represents a year-on-year drop of more than 20 per cent, with exports in February dropping even lower to just 360,000 tons.

Batumi is fast losing its status as an oil products outlet, handling mostly crude oil from Kazakhstan – mostly from TCO and Geneva based trader Euro Asian – plus Azeri Light brought in by rail from ExxonMobil. Most of the transportation to Batumi is handled by the terminal's marketing arm Petrotrans.

For more news and expert analysis about the Caspian region, please see Caspian Focus.

© 2011 Menas Associates