BP given approval to export US crude

Booming oil and gas production in the United States, spurred on by the success of unconventional fields, has brought about the beginning of a reversal of long established import/export trends in the global energy markets. It has emerged that BP has received permission from the US Government to begin exporting US crude to refineries in Canada.

Another major player in the oil industry, Shell, has also been revealed as having applied for an export permit. According to Shell spokesman, Kayla Macke, Shell has “applied to the Department of Commerce to export domestic U.S. crude oil.”

At present, the main destination for this oil is Canadian refineries, built to process the high quality light oil produced from unconventional plays such as the Bakken. Whilst many in the US might object to domestically produced crude being exported, the majority of US crude that makes its way to Canadian refineries is actually re-imported to the US. The reason for this circular process is that US domestic refineries, such as those along the Gulf coast are designed to process cheaper, heavier crudes from overseas and would be unsuitable for dealing with such high quality crude.

Figures from July this year show that US crude exports to Canada are currently in the region of 77 000 bpd. Whilst this may seem a significant amount, the figure is dwarfed by the approximately 9 million bbls imported by the US on a daily basis.

The next, and significantly more controversial, step likely to be taken by oil and gas companies operating in the US is to apply for permits to export US crude significantly further afield to other markets, providing no guarantee that the oil will return as fuel.

Edited from various sources by David Bizley

Read the article online at: https://www.worldpipelines.com/business-news/12102012/bp_given_permission_to_export_us_crude/