Statoil to Ship More North Sea Forties Crude Oil to Asia

Frontline's VLCC FRONT CHAMPION. Photo: Frontline

SINGAPORE (Dow Jones)–Norwegian oil major Statoil ASA (STL.OS) has chartered a vessel to ship North Sea Forties crude oil to Asia, in what could be at least the fourth arbitrage voyage for the Brent component to Asia in three months.

Statoil has provisionally chartered DHT Eagle to ship 2 million barrels of Forties crude from Hound Point to Asia, loading Feb. 12, a shipping fixture showed Monday. The cargo will likely head to South Korea, where Statoil has storage infrastructure.

South Korean appetite for North Sea crude has grown since its free-trade agreement with Europe came into effect in July. The agreement allows Korean buyers of North Sea Crude to redeem 3% of the price, making arbitrage deals attractive.

A narrowing of the Brent/Dubai exchange of futures for swaps–or EFS, which is the sweet-sour crude oil price differential–has also made Brent-linked grades more attractive to Asian buyers, increasing the flow of oil from west to east in recent months.

Exports of more North Sea crude oil will likely firm the European market, somewhat offsetting the bearish impact of Petroplus Holdings AG (PPHN.PB) recently shutting down some of its refineries.

The latest fixture, if confirmed, would mean that a total of 8 million barrels of Forties will have left the North Sea for Asia in three months.

Earlier this month, Statoil chartered VLCC Front Champion, at $6.10 million, for Jan. 21-23 loading from Mongstad port in Norway, to ship 2 million barrels of crude oil to South Korea.

-By Gurdeep Singh, Dow Jones Newswires