Page 11 - MEOG Week 23

MEOG tenDers MEOG
NIOC offers more crude on exchange
Iran
THE National Iranian Oil Co. (NIOC) this week o ered another batch of 2 million barrels of light crude via the Iran Energy Exchange (IrENEX). is is the third o ering on the exchange in the current Iranian calendar year, which began on March 21 and according to official oil sector news agency shana, the base price has been set at Us$67.32 per barrel.
Tehran has been experimenting with selling crude over the exchange in response to the Us ramping up pressure on Iranian oil customers to reduce shipments. It has held 10 o erings of light crude on IrENEX since October 28 last year as it tries to provide a variety of sales mechanisms to appeal to buyers.
The first offer was fairly warmly received, with 280,000 barrels purchased out of the total of 1 million barrels at a price of Us$74.85. How- ever, the o erings have had patchy results since, with the most recent oil o ering, held on May 21, ending without any sales. A total of 1.1 million barrels of crude have been sold so far over the exchange.
In an e ort to entice more buyers, the Min- istry of Petroleum (MoP) has cut the minimum purchase order for the June 11 offering from 35,000 barrels to 1,000 barrels for land delivery, while the clearance period for payments has been extended from 60 days to 90. shana added that interested parties must pay 6% of their order value in local or foreign currency by 12:30pm local time (GMT+4:30), two hours before trad- ing begins.
Cargoes can either be delivered by sea at the Kharg Island terminal or by land at the Tabriz re nery.
NIOC announced via shana last week that it was o ering 2 million barrels of gas condensate on IrENEX on June 3 at Us$67.14 per barrel. e minimum purchase during this o ering was noted at 1,000 barrels.
The amendments to the purchase and
payment terms are nothing new. An amendment to the Iranian budget was approved on February 17, requiring the Ministry of Petroleum (MoP) to o er 2 million barrels per month of light crude on IrENEX. is came in addition to the 2 mil- lion barrels of heavy crude oil and 2 million bar- rels of natural gas condensates and natural gas the ministry was already obliged to supply to the exchange.
IrENEX held four rounds of oil o erings on behalf of NIOC in two weeks in January, during which changes were made following the third bidding round, allowing purchasers to pay both in Iranian rials and in foreign currencies.
Tehran is clearly adapting as it nds its way with the new approach to oil marketing, with varying levels of success experienced in previ- ous o ers.
In October, Middle East Oil & Gas (MEOG) revealed that negative developments between Iran and russia and India had brought about the resurrection of the idea of selling crude through the bourse, which was originally tabled in 2014.
“lukoil told Tehran that it was no longer going to sell Iran’s oil to international markets according to the previously agreed terms, and what it now o ered was a lot worse from Iran’s perspective,” a source who works closely with the MoP told MEOG at the time.
A Minute of Agreement (MoA) remains in place between Moscow and Iran for the broader build-out of Iran’s oil sector, however, the same source told MEOG this week that “russia has stepped back to avoid the Us Treasury’s punitive measures”.
He added: “I think it would be safe to say that russia still remembers their losses from Iraq pre-invasion and do not wish to repeat their mistakes. should the situation improve, their involvement in the Iranian energy sector will make them the key player in both gas and crude market.”™
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