Sample Report: Argus Crude

Argus Crude Crude market prices and analysis

Issue 21-41 | Monday 1 March 2021

Market Commentary prICE summary

Prices drop back Price summary $/bl Prices dropped back further in the week’s opening session. Basis Diff Bid Ask ± Towards 4.30pm in London the Argus May North Sea price North Sea was $65.07/bl, a drop of 27¢/bl from the same time in the Dated May +0.46 65.50 65.56 -0.31 Dated (new) May -0.95 64.09 64.15 -1.16 previous session. Brent Dated +0.85 66.35 66.41 -0.31 Forties Dated +0.90 66.40 66.46 -0.31 ESPO Blend loadings at 11-month high Oseberg Dated +1.10 66.60 66.66 -0.31 Seaborne exports of ESPO Blend crude from Russia’s Kozmino Ekofisk Dated +0.86 66.36 66.42 -0.30 Troll Dated +1.30 66.80 66.86 -0.31 port could rise to an 11-month high of 696,000 b/d in April, Russia-Caspian according to a preliminary loading programme. Urals NWE Dated -2.40 63.10 63.16 -0.51 Urals Med Aframax Dated -1.10 64.40 64.46 -0.31 Trafigura in deal to supply UK Lindsey refinery BTC Blend Dated +0.80 66.30 66.36 -0.31 UK-based Prax Group said it has agreed a crude and feed- CPC Blend Dated -2.75 62.75 62.81 -0.31 Russia-Caspian fob netbacks stocks supply deal with trading firm Trafigura for the 110,000 Urals fob Primorsk Dated -3.38 62.12 62.18 -0.48 b/d Lindsey refinery in northeast England. Urals fob Novo Aframax Dated -3.06 62.44 62.50 -0.20 CPC fob terminal Dated -3.67 61.83 61.89 -0.31 Congo loadings to slow in April BTC fob Ceyhan Dated -0.28 65.22 65.28 -0.23 Mediterranean Crude loadings from Congo (Brazzaville) will fall to 215,000 Saharan Blend Dated -0.05 65.45 65.51 -0.31 b/d in April from the 237,000 b/d planned in March, accord- Es Sider Dated -1.80 63.70 63.76 -0.31 ing to programmes. Kirkuk Dated -3.75 61.75 61.81 -0.31 West Africa Brent, Forties, Oseberg, Ekofisk vs Dated $/bl Bonny Light Dated -0.35 65.15 65.21 -0.31 Girassol Dated +0.75 66.25 66.31 -0.31 Brent Forties Oseberg Hungo Dated -0.50 65.00 65.06 -0.31 Ekofisk Troll US pipeline 3 Basis Diff VWA ± LLS Apr WTI +2.35 62.99 -0.81 Mars Apr WTI -0.09 60.55 -0.49 2 Argus Sour Crude Index (ASCI™) ASCI Apr WTI -0.09 60.55 -0.15 hh 1 Canada pipeline Basis Diff Bid Ask ± Synthetic CMA Nymex -0.10 59.99 60.29 -0.80 0 WCS CMA Nymex -11.25 48.74 49.24 -1.10 North Sea Dated = 0 Americas cargoes ANS CMA Nymex +3.18 63.37 63.47 -0.71 -1 Vasconia Jun WTI +1.31 61.02 61.52 -0.71 4 Sep 20 2 Nov 20 31 Dec 20 1 Mar 21 Asia-Pacific Minas ICP +1.00 63.34 63.44 -0.76 Contents Tapis Dated +1.60 67.08 67.18 -0.31 North West Shelf Dated +1.80 67.28 67.38 -0.31 Russia Asia-Pacific Futures and forward markets 2 ESPO Blend Apr Dubai +1.35 64.83 64.93 -0.10 North Sea Dated 3 Sokol May Dubai +1.90 64.78 64.88 -0.70 Commentary and prices 4-22 Mideast Gulf Deals done 24 Dubai May 63.99 64.09 -0.05 Daily netbacks 26 Oman May Dubai +1.30 64.18 64.28 -0.01 Industry and infrastructure news 28 Murban May Adnoc +0.00 63.63 63.73 -

futures and forward markets

Futures markets $/bl Forward markets $/bl Open High Low S'pore* London† Settle ± Bid Ask ±

Ice Brent North Sea, Singapore close May 64.85 65.93 63.19 65.59 64.90 63.69 -0.73 Apr 66.38 66.47 -0.04 Jun 64.00 65.20 62.51 64.88 64.18 63.02 -0.71 May 65.70 65.77 +0.06 Jul 63.04 64.48 61.82 64.17 63.47 62.33 - *4:30pm Singapore minute marker, †4:30pm London minute marker Jun 64.98 65.07 -0.00 Nymex Light Sweet Jul 64.27 64.36 -0.06 Apr 61.95 62.92 59.96 62.61 61.76 60.64 -0.86 North Sea, London close May 61.42 62.67 59.77 62.35 61.52 60.42 -0.81 Dated 65.50 65.56 -0.31 Jun 61.15 62.17 59.34 61.85 61.05 59.96 -0.78 Apr 65.66 65.74 -0.33 Jul 60.56 61.54 58.79 61.20 60.50 59.38 -0.74 Dec 21 56.52 -0.68 May 65.04 65.10 -0.27 Dec 22 52.87 -0.44 Jun 64.33 64.41 -0.29 Dec 23 50.89 -0.32 Jul 63.62 63.70 -0.32 Dec 24 49.79 -0.30 Dubai, Singapore close Dec 25 49.22 -0.35 May 63.99 64.09 -0.05 DME Oman May 64.23 -0.01 Jun 63.48 63.58 -0.10 Jun 63.58 -0.33 Jul 62.88 62.98 -0.16 Jul 62.94 -0.31 Aug 62.16 62.26 - Aug 62.29 - Dubai, London close Volume bl 1,228,000 May 63.34 63.42 -0.28 Tocom Mideast Gulf (day session) Jun 62.82 62.92 -0.33 May 62.75 -0.10 Jun 61.99 -0.17 Jul 62.22 62.32 -0.39 Jul 61.52 -0.04 Aug 61.50 61.60 - Aug 60.97 - WTI Cushing, 1:30pm Houston Volume bl 1,379,673 Apr 60.62 60.66 -0.86 May 60.40 60.44 -0.81 INE crude futures Jun 59.94 59.98 -0.78 Timing Settle Yuan/bl ± Settle $/bl ± Jul 59.36 59.40 -0.74 Apr 4 07.20 -2.80 62.88 -0.48 May 413.20 2.40 63.81 +0.33 Intermonths $/bl Jun 416.30 0.90 64.29 +0.10 Jul 417.0 0 -1.40 64.40 -0.25 Mid Volume bl 108,925,500 North Sea Singapore close Apr/May +0.69 Ice Brent: First month vs second month $/bl May/Jun +0.71 Jun/Jul +0.71 2.0 Ice Brent second month = 0 North Sea London close 1.5 Apr/May +0.63

1.0 May/Jun +0.70 Jun/Jul +0.71 0.5

hh 0.0 Forward spreads 4:30pm London $/bl N Sea/Dubai WTI/N Sea WTI/Dubai -0.5 Apr -3.940 -1.0 May +1.690 -3.550 -1.860 -1.5 Jun +1.500 -3.320 -1.820 7 Sep 20 3 Nov 20 31 Dec 20 1 Mar 21 Jul +1.390 -3.160 -1.770

North Sea Dated

North Sea Dated calculation $/bl North Sea flat price Argus derives a flat price from trade of a month-ahead North Sea flat price forward contract for the delivery of Brent, Forties, Oseberg, Delivery Volume North Sea partial trade Price period bl Ekofisk or Troll, taking a weighted average of trade between volume weighted average May 300,000 65.07 4:29pm and 4:30pm in London. In the absence of trade, a (VWA) combination of the Ice Brent futures one-minute marker and CFD value against relevant basis month the exchange of futures for physical (EFP) market is used. Basis Midpoint 8 Mar-12 Mar May +0.05 Anticipated Dated 15 Mar-19 Mar May -0.09 We then look at contracts for difference (CFDs), with which 22 Mar-26 Mar May -0.18 the market anticipates North Sea Dated in the coming weeks 29 Mar-2 Apr May -0.35 at differentials to the forward month. Prices falling between 5 Apr-9 Apr May -0.50 10 days and a full calendar month ahead are averaged. 12 Apr-16 Apr May -0.64 Physical differentials CFD value for 11 Mar-1 Apr May -0.17 Argus assesses trade in physical cargoes of Brent, Forties, North Sea Anticipated Dated calculation Month Price Oseberg, Ekofisk and Troll crude, assigning differentials to North VWA of North Sea partial trade May 65.07 Sea Dated to each grade for the 10-days to month-ahead range. CFD value for 11 Mar-1 Apr May -0.17 Dated components Anticipated Dated 64.90 The combination of the Anticipated Dated and the physical Physical differentials for 11 Mar-1 Apr values gives each grade’s component of North Sea Dated. Grade Basis Diff midpoint Quality premiums are deducted from Oseberg, Ekofisk and Brent Dated +0.85 Troll for benchmarking purposes. The lowest-priced of the Forties Dated +0.90 five components is used to set the price of North Sea Dated. Oseberg Dated +1.10 Ekofisk Dated +0.86 Troll Dated +1.30 Components of North Sea Dated $/bl

North Sea quality premiums (QP) for 11 Mar-1 Apr 65.85 Oseberg +0.31 Ekofisk +0.23 65.80 Troll +0.47 65.75 North Sea Dated calculation Anticipated Add Diff Subtract 65.70 Price Dated midpoint QP 65.65 Brent component of Dated 64.90 +0.85 65.75 Forties component of Dated 64.90 +0.90 65.80 65.60 Oseberg component of Dated 64.90 +1.10 +0.31 65.69 65.55 Ekofisk component of Dated 64.90 +0.86 +0.23 65.53 Troll component of Dated 64.90 +1.30 +0.47 65.73 65.50 North Sea Dated is the Brent Forties Oseberg Ekofisk Troll 65.53 lowest component North Sea forward curve establishing Anticipated Dated $/bl Dated components-establishing North Sea Dated $/bl 66.00 66.10

66.00 65.50 65.90

65.80 65.00 Brent CFD week 65.70 Forties MAY Ose. with QP hh 64.50 JUNE JULY 65.60 Eko. with QP Troll with QP 65.50 64.00 65.40

63.50 65.30 2 Mar 20 Apr 8 Jun 27 Jul 10 Mar 19 Mar 29 Mar

North Sea

Delivered-Rotterdam values of US crude WTI came under North Sea $/bl pressure, as demand in Northwest Europe remained muted Basis Diff Bid Ask ± in the week’s first session. Dated* May +0.46 65.50 65.56 -0.31 Mercuria offered a prompt cargo of WTI Midland arriv- Dated (new)** May -0.95 64.09 64.15 -1.16 ing between 21-25 March at the full month March North Sea Brent† Dated +0.85 66.35 66.41 -0.31 Forties Dated +0.90 66.40 66.46 -0.31 Dated average. The 700,000 bl cargo will cross the Atlantic Oseberg Dated +1.10 66.60 66.66 -0.31 aboard the Aframax FSL Hong Kong. The unconfirmed offer Ekofisk Dated +0.86 66.36 66.42 -0.30 failed to spark any buying interest. Troll Dated +1.30 66.80 66.86 -0.31 No other trading activity was observed in the afternoon Statfjord cif Rotterdam Dated +1.00 66.50 66.56 -0.31 window. Statfjord fob platform Dated +0.43 65.93 65.99 -0.31 The Argus Quality Premiums (QP) for North Sea bench- Gullfaks cif Rotterdam Dated +1.00 66.50 66.56 -0.31 mark crude grades loading in April will drop from those Gullfaks fob platform Dated +0.43 65.93 65.99 -0.31 Flotta Gold Dated -0.20 65.30 65.36 -0.31 loading in March. Grane Dated -0.50 65.00 65.06 -0.31 The April QPs for Oseberg and Ekofisk will drop by 8¢/bl Johan Sverdrup Dated -1.30 64.20 64.26 -0.31 and 5¢/bl, respectively, to 24¢/bl and 18¢/bl. Troll's QP will *Argus North Sea Dated is the equivalent of Platts dated Brent fall to 41¢/bl from 48¢/bl. **New North Sea Dated incorporates non-North Sea grades delivered into northwest Europe. A full explanation can be found on p6 The Quality Adjustments (QA) that Argus uses in the †Argus Brent is the price of physical Brent calculated using Argus North Sea Dated plus the Dated-related market differential for Brent calculation of its New North Sea Dated price will also move North Sea EFP lower. The Ekofisk QA will fall by 6¢/bl on the month to 42¢/ Basis Diff bl in April, and the Troll and Oseberg QAs will both fall by May Ice +0.15 8¢/bl to 65¢/bl and 48¢/bl, respectively. Jun Ice +0.17 The QAs for Nigerian grades Qua Iboe and Bonny Light Ice minute markers will drop by 17¢/bl and 18¢/bl, respectively, to 43¢/bl and 1-minute ± 46¢/bl. May 64.90 -0.28 Jun 64.18 -0.33 Elsewhere, the quality of Forties was slightly lighter and Jul 63.47 - sweeter last week, as the Buzzard field share of the grade Dated CFDs, Singapore close fell. Basis Bid Ask ± Buzzard accounted for 21pc of unstabilised Forties 8 Mar-12 Mar May -0.02 +0.06 +0.15 production in the week to 28 February, down from 26pc 15 Mar-19 Mar May -0.19 -0.11 +0.08 the week before, according to Forties Pipeline System (FPS) 22 Mar-26 Mar May -0.27 -0.19 +0.05 operator Ineos. 29 Mar-2 Apr May -0.38 -0.30 +0.00 Dated CFDs, London close A 21pc Buzzard contribution yields a Forties blend with 8 Mar-12 Mar May +0.01 +0.09 +0.03 a gravity of around 40.9°API and sulphur content of about 15 Mar-19 Mar May -0.13 -0.05 +0.06 0.56pc. 22 Mar-26 Mar May -0.22 -0.14 +0.05 North Sea Dated, WTI, Tapis $/bl 29 Mar-2 Apr May -0.39 -0.31 +0.00 5 Apr-9 Apr May -0.54 -0.46 -0.16 North Sea Dated WTI Tapis 12 Apr-16 Apr May -0.68 -0.60 -0.18 70 Delivered northwest Europe assessments Basis Diff Bid Ask ± CPC Blend cif Rotterdam Dated -0.45 65.05 65.11 -0.31 60 BTC Blend cif Rotterdam Dated +1.75 67.25 67.31 -0.31 Saharan Blend cif Rotterdam Dated +1.65 67.15 67.21 -0.31

hh 50 Bonny Light cif Rotterdam Dated +1.50 67.0 0 67.06 -0.31 Qua Iboe cif Rotterdam Dated +1.45 66.95 67.01 -0.31 Escravos cif Rotterdam Dated +1.50 67.0 0 67.06 -0.31 40 WTI cif Rotterdam (period 1)* Dated -0.05 65.45 65.51 -1.16 WTI cif Rotterdam (period 2)* Dated -0.05 65.45 65.51 -1.16 *Period 1 covers cargoes arriving at Rotterdam from 12 days forward to one 30 month ahead + two days. Period 2 covers cargoes arriving at Rotterdam from 26 Aug 20 26 Oct 20 24 Dec 20 1 Mar 21 one month ahead + three days forward to 60 days.

North Sea

Ineos expects Buzzard's contribution to average 25.2pc North Sea $/bl this month, which would give Forties an average gravity of North Sea quality premiums (QP) around 40.3°API and sulphur content near 0.62pc. Forties Mar Apr quality will be slightly sweeter and lighter next month, as Ekofisk 0.23 0.18 Ineos forecast a 23.5pc Buzzard contribution. Oseberg 0.32 0.24 The UK's crude production declined in January, when Troll 0.48 0.41 domestic demand was constrained by a third national lock- De-escalators down. Sulphur +0.09 Production averaged 860,000 b/d, down by 9pc from North Sea calculations December's revised 945,000 b/d and around 18pc below Basis Price the 1mn b/d achieved in January 2020, according to latest Volume-weighted average of North Sea partial traded May 65.07 government figures. Ice Brent marker May 64.90 The Argus May North Sea price was $65.07/bl, a drop of Exchange of futures for physical (EFP) May +0.15 27¢/bl based on 300,000 bl of trade in the minute leading up North Sea basis (flat price) May 65.07 to the timestamp. CFDs climbed. The front-week 8-12 March Anticipated Dated based on 10 days-month ahead CFD strip: CFD increased by 3¢/bl to May North Sea +5¢/bl, while the Price ± second-week 15-19 March CFD gained 6¢/bl to May North Sea 11 Mar-01 Apr 64.90 -0.32 -9¢/bl. Argus Brent component of Dated 65.75 -0.32 Argus Forties component of Dated 65.80 -0.32 Forties vs CPC Blend $/bl Argus Oseberg component of Dated (QP applied) 65.69 -0.31 Argus Oseberg component of Dated (no QP applied) 66.00 -0.32 4.0 Argus Ekofisk component of Dated (QP applied)* 65.53 -0.31 CPC Blend = 0 3.5 Argus Ekofisk component of Dated (no QP applied) 65.76 -0.31 Argus Troll component of Dated (QP applied) 65.73 -0.31 3.0 *the lowest component sets Dated 2.5 Argus alternative Dated illustrations 2.0 Basis Diff Price ± hh Argus Dated Average May +0.83 65.90 -0.32 1.5 Argus Dated BFOE* May +0.46 65.75 -0.32 1.0 Argus Dated BFO May +0.62 65.75 -0.32 0.5 Argus Dated FOE May +0.46 65.76 -0.32 Quality premiums (QP) not applied to above *Argus Dated BFOE is equivalent to 0.0 North Sea Dated (no QP) 4 Sep 20 2 Nov 20 31 Dec 20 1 Mar 21 Argus North Sea Reference Price Argus North Sea Reference Price (NSRP) 65.65 -0.30 Ekofisk vs naphtha 65 para NWE cif $/bl Argus Synthetic Brent (NSRP component) 64.96 -0.30 Dated to Ice Brent frontline, London close 4 Bid Ask ± 3 Naphtha 65 para NWE = 0 Mar +0.09 +0.17 +0.08 2 Apr +0.09 +0.17 -0.01 1 May +0.20 +0.28 +0.01 0 Jun +0.09 +0.17 -0.01 2Q21 +0.13 +0.21 +0.00 hh -1 3Q21 +0.02 +0.10 +0.01 -2 2022 -0.11 -0.05 -0.08 -3 Ice Bwave, 26 Feb 21 -4 May 65.13 -5 Jun 64.44 4 Sep 20 2 Nov 20 31 Dec 20 1 Mar 21 Jul 63.77 Saudi formula base 61.89

NEW North Sea DATED

New North Sea Dated calculation $/bl North Sea flat price Argus derives a flat price from trade of a month-ahead North Sea flat price forward contract for the delivery of Brent, Forties, Oseberg, Delivery Volume North Sea partial trade Price period bl Ekofisk or Troll, taking a weighted average of trade between volume weighted average 4:29pm and 4:30pm in London. In the absence of trade, a May 300,000 65.07 (VWA) combination of the Ice Brent futures one-minute marker and CFD value against relevant basis month the exchange of futures for physical (EFP) market is used. Basis Midpoint 8 Mar-12 Mar May +0.05 Anticipated Dated 15 Mar-19 Mar May -0.09 22 Mar-26 Mar May -0.18 We then look at contracts for difference (CFDs), with which 29 Mar-2 Apr May -0.35 the market anticipates North Sea Dated in the coming weeks 5 Apr-9 Apr May -0.50 at differentials to the forward month. Prices falling between 12 Apr-16 Apr May -0.64 10 days and a full calendar month ahead are averaged. CFD value for 11 Mar-1 Apr May -0.17 North Sea Anticipated Dated calculation Physical differentials Month Price Argus assesses fob trade in physical cargoes of Brent, For- VWA of North Sea partial trade May 65.07 ties, Oseberg, Ekofisk and Troll crude, assigning differentials CFD value for 11 Mar-1 Apr May -0.17 to North Sea Dated to each grade for the 10-days to month- Anticipated Dated 64.90 ahead range. Argus then assesses cif Rotterdam trade in Physical differentials for 11 Mar-1 Apr Bonny Light, Qua Iboe and WTI. Prices falling between 12 Grade Basis Diff midpoint days and a calendar month ahead — plus two days — are Brent Dated +0.85 then averaged. Then a freight value based on a five-day Forties Dated +0.90 average of the Argus UK-UK Continent rate is applied to the Oseberg Dated +1.10 Ekofisk Dated +0.86 cif values in order to construct virtual North Sea fob values Troll Dated +1.30 for the three non-North Sea grades. Bonny Light cif Rotterdam Dated +1.50 Qua Iboe cif Rotterdam Dated +1.45 Dated components WTI cif Rotterdam (period 1) Dated -0.05 The combination of the Anticipated Dated and the physical Freight adjustment values gives each grade’s component of North Sea Dated. Five-day average UK-UK continent rate 22-26 Feb 0.73 Quality adjustments are deducted from Oseberg, Ekofisk, Five-day average UK-UK continent rate 23 Feb-1 Mar 0.73 Troll, Bonny Light and Qua Iboe for benchmarking purposes. North Sea quality adjustments (QA) for 11 Mar-1 Apr The lowest-priced of the eight components is used to set the Oseberg +0.55 price of North Sea Dated. Ekofisk +0.48 Troll +0.72 Bonny Light +0.62 Dated components on a fob Nsea basis Qua Iboe +0.58

New North Sea Dated calculation 66.00 Subtract Components of New North Anticipated Add Diff QA and Price Sea Dated Dated midpoint freight 65.50 Brent 64.90 +0.85 65.75 65.00 Forties 64.90 +0.90 65.80 Oseberg 64.90 +1.10 +0.55 65.45 64.50 Ekofisk 64.90 +0.86 +0.48 65.28 Troll 64.90 +1.30 +0.72 65.48 64.00 Bonny Light 64.90 +1.50 +1.35 65.05

WTI Qua Iboe 64.90 +1.45 +1.31 65.04 Troll Brent

Forties Ekofisk WTI 64.90 -0.05 +0.73 64.12 Oseberg Qua Iboe New North Sea Dated is the 64.12 Bonny Light lowest component

Russia-Caspian

Urals values in northwest Europe lost ground amid muted Russia-Caspian $/bl regional demand for March-loading supplies, while details Basis Diff Bid Ask ± emerged on Turkish refiner Tupras’ latest buy tender. Urals NWE Dated -2.40 63.10 63.16 -0.51 Trading firm Trafigura offered a 100,000t cargo of Urals Urals Med Aframax Dated -1.10 64.40 64.46 -0.31 crude loading at Primorsk or Ust-Luga on 11-15 March at Dated -2.35 cif Rotterdam, but was unable to attract a buyer Urals Med Suezmax Dated -1.25 64.25 64.31 -0.31 at that level. The offer, which was not confirmed, came in Siberian Light Dated -0.75 64.75 64.81 -0.31 some 15¢/bl below reported traded levels for marginally CPC Blend Dated -2.75 62.75 62.81 -0.31 earlier March dates last week. BTC Dated +0.80 66.30 66.36 -0.31 Signs of lacklustre regional demand for Russian export Azeri Light Dated +0.65 66.15 66.21 -0.31 blend emerged elsewhere, as Turkish refiner Tupras was Netbacks said to have eschewed the medium sour grade in its latest buy tender. Traders suggested the firm opted instead for Urals fob Primorsk Dated -3.38 62.12 62.18 -0.48 low-sulphur Siberian Light from trader Maddox and Libyan Es Urals fob Ust-Luga Dated -3.39 62.11 62.17 -0.49 Sider from Total trading-arm Totsa instead, though further Urals fob Novo (Aframax) Dated -3.06 62.44 62.50 -0.20 information did not surface. Urals fob Novo (Suezmax) Dated -2.34 63.16 63.22 -0.31 Maddox is expected to supply Socar’s 85,000t parcel of Urals cif Black Sea Dated -2.25 63.25 63.31 -0.27 Siberian Light scheduled to load at Novorossiysk is the Black CPC fob terminal Dated -3.67 61.83 61.89 -0.31 Sea on 30-31 March. Tupras’ tender originally listed 80,000t to 100,000t of Urals, Siberian Light or Es Sider as eligible for BTC fob Ceyhan Dated -0.28 65.22 65.28 -0.23 29 March-10 April delivery to Tutunciftlik or Aliaga. Azeri Light fob Supsa Dated -1.16 64.34 64.40 -0.22 Urals differentials in northwest Europe have held at Retrospective netbacks their lowest levels since April last year in recent sessions, Urals fob Primorsk Dated -2.29 63.21 63.27 -0.67 though signs emerged that a bulk shipment could soon be Urals fob Ust-Luga Dated -2.29 63.21 63.27 -0.67 set for delivery east of Suez. As of 1 March, vessel tracking Urals fob Novo (Aframax) Dated -2.49 63.01 63.07 -0.78 indicated three cargoes of Urals were en route for the Skaw, where they could be transferred onto a larger vessel. Lukoil CPC Blend fob Dated -2.43 63.07 63.13 -0.48 trading-arm Litasco had booked the very large crude carrier Turkish straits demurrage (VLCC) Antigone to ship a 270,000t parcel to Ningbo in China Delay days 12 on 25 March, though port reports indicated this fixture had Aframax demurrage rate $/d 30,000 now failed. Suezmax demurrage rate $/d 27,50 0 Elsewhere, Azeri crude was en route for the Ukraine, according to shipping reports. The Socar-chartered Heydar

Bonny Light vs Azeri Light $/bl CPC Blend vs Saharan Blend $/bl

-0.2 0.0 Azeri Light = 0 Saharan Blend = 0 -0.4 -0.5

-0.6 -1.0 -0.8 -1.5 hh -1 hh -2.0 -1.2 -2.5 -1.4

-1.6 -3.0 4 Sep 20 2 Nov 20 31 Dec 20 1 Mar 21 4 Sep 20 2 Nov 20 31 Dec 20 1 Mar 21

Russia-Caspian

Aliyev departed Turkey’s Ceyhan on 27 February laden with Druzhba pipeline — Urals (monthly prices) $/bl a roughly 675,000 bl and is currently signalling for Yuzhny, to Basis Diff low Diff high Low High the east of Odessa. Slovakia The majority of Azeri crude that sails for the Ukraine discharges at Odessa, from which it is often scheduled for Jan Monthly avg of Dated -1.72 -1.22 53.01 53.51 onward delivery to Ukrtatnafta’s 363,000 b/d Kremenchug Dec Monthly avg of Dated -1.72 -1.22 48.00 48.50 refinery in Poltava Oblast. It can also head along the Odessa- Nov Monthly avg of Dated -0.75 -0.25 41.79 42.29 Brody pipeline to Belarusian state-owned BNK’s 323,000 b/d Hungary Mozyr facility. Azeri crude values were otherwise unchanged in thin Jan Monthly avg of Dated -1.72 -1.22 53.01 53.51 trade, with the latest deals for mid-March dates reportedly Dec Monthly avg of Dated -1.72 -1.22 48.00 48.50 struck at around Dated +0.80 cif Augusta, pressured by a Nov Monthly avg of Dated -0.75 -0.25 41.79 42.29 limited arbitrage outlook and ample competing Libyan crude Poland supplies. No activity on Russian export blend, Siberian Light or Jan Monthly avg of Dated -1.67 -1.27 53.06 53.46 Azeri crude was confirmed. Dec Monthly avg of Dated -2.85 -1.48 46.87 48.24

Nov Monthly avg of Dated -1.85 -0.49 40.69 42.05

Germany

Urals Med vs North Sea Dated $/bl Jan Monthly avg of Dated -2.30 -1.20 52.43 53.53 Dec Monthly avg of Dated -2.20 -1.61 47.52 48.11 1.0 North Sea Dated = 0 Nov Monthly avg of Dated -1.15 -0.62 41.39 41.92 0.5

0.0 North Sea Dated month average $/bl

hh Jan 54.73 -0.5 Dec 49.72

-1.0 Nov 42.54

-1.5 4 Sep 20 2 Nov 20 31 Dec 20 1 Mar 21

Urals NWE vs North Sea Dated $/bl Urals Med vs Mars $/bl

1.0 4 North Sea Dated = 0 Mars = 0 0.5 3 0.0 2 -0.5

hh hh -1.0 1

-1.5 0 -2.0

-2.5 -1 4 Sep 20 2 Nov 20 31 Dec 20 1 Mar 21 27 Aug 20 27 Oct 20 29 Dec 20 1 Mar 21

Mediterranean

Turkish refiner Tupras booked Libyan crude in its latest Mediterranean $/bl tender, following depressed interest in the grade in recent Basis Diff Bid Ask ± trade sessions. Saharan Blend Dated -0.05 65.45 65.51 -0.31 Traders said Tupras bought Libyan flagship Es Sider crude Zarzaitine Dated -0.10 65.40 65.46 -0.31 from equity producer Total and a cargo of Russian Siberian Es Sider Dated -1.80 63.70 63.76 -0.31 Light from Maddox in its latest tender. Both grades and Kirkuk Dated -3.75 61.75 61.81 -0.31 Russian Urals were listed as options for supply of 80,000t Basrah Light cif Augusta Dated -0.25 65.25 65.31 -0.31 Basrah Light fob Sidi Kerir Dated -0.10 65.40 65.46 -0.31 to 100,000t for 29 March-10 April delivery to Tutunciftlik or Basrah Medium cif Augusta Dated -0.30 65.20 65.26 -0.31 Aliaga. While many Mediterranean refiners turn to Es Sider as Basrah Heavy cif Augusta Dated -0.80 64.70 64.76 -0.31 a light sweet crude feedstock, Tupras tends to use the grade Iranian Light fob Sidi Kerir Dated -2.67 62.83 62.89 -0.31 and Siberian Light as indirect substitutes for sour supplies. Iranian Heavy fob Sidi Kerir Dated -5.47 60.03 60.09 -0.31 Results from the latest tender were not confirmed, and the Suez Blend Dated -2.80 62.70 62.76 -0.31 award levels were not immediately known. Es Sider discounts to the North Sea benchmark widened Official formula prices $/bl at the end of last week, with market participants report- Basis ing offers at small discounts to the yet-unpublished official Algeria Jan Feb Mar March formula price. Market participants expected Libya’s Saharan Blend Dated +0.35 +0.15 +0.20 state-run NOC to release said official formula prices over Syria Aug Sep Oct the following sessions. It was unclear if Tupras procured its Syrian Light Dated na na na crude at deeper discounts to this basis than the latest spot Souedie Dated na na na offers, given its extended 90-day payment requirements in Libya Dec Jan Feb its tender. Al-Jurf Urals Med -1.30 -1.30 -1.15 Es Sider was otherwise most recently viewed at levels Amna Dated -1.55 -1.55 -1.35 equivalent to North Sea Dated -1.80 fob Libya at the end of Bouri Urals Med -3.00 -3.00 -2.85 last week. Brega Dated -1.05 -0.95 -0.95 Iraqi crude exports marketed by federal company Somo Bu Atiffel Dated -0.55 -0.55 -0.65 added 3pc on the month to 2.96mn b/d in February, driven Es Sider Dated -1.65 -1.65 -1.40 by increases in Basrah shipments, Iraq’s oil ministry said. Esharara Dated -0.50 -0.50 -0.50 Combined Basrah crude loadings rose by 2pc from January to Mellitah Dated -1.65 -1.55 -1.55 2.83mn b/d in February. Mesla Dated -1.95 -1.85 -1.70 Somo-marketed Kirkuk blend volumes dropped by 36pc Mesla ex Ras Lanuf Dated na na na on the month to 63,000 b/d in February. The company’s Sarir Dated -3.90 -3.80 -3.60 figures do not capture the majority of Kirkuk blend supplies, Sirtica Dated -2.15 -2.15 -2.10 which are sold by the Kurdistan Regional Government. Zueitina Dated -1.40 -1.40 -1.50 Somo’s revenues gained 5pc on the month to around $5bn in February, while the company achieved an average Basrah Light cif Augusta vs Urals Med $/bl crude price of $60.33/bl on the month, up by 13pc from 2.0 January. 1.5 The Opec basket price picked up by a sharp $6.67/bl — Urals Med = 0 of 12pc — on the month to $61.05/bl in February, up from 1.0 $54.38/bl in January. 0.5

0.0 hh -0.5

-1.0

-1.5

-2.0 2 Dec 20 4 Jan 21 1 Feb 21 1 Mar 21

West Africa

West Africa $/bl Congo (Brazzaville) and Chad’s April-loading programmes Basis Diff Bid Ask ± emerged, while details started to emerge on Indian IOC's Agbami Dated -0.80 64.70 64.76 -0.31 latest tender. Amenam Dated -0.60 64.90 64.96 -0.31 Export of crude from Congo (Brazzaville) will fall to Bonga Dated -0.30 65.20 65.26 -0.31 215,000 b/d in April from the 237,000 b/d planned in March, Bonny Light Dated -0.35 65.15 65.21 -0.31 according to the country’s loading programmes. Flagship Brass River Dated -0.55 64.95 65.01 -0.31 Egina Dated +0.60 66.10 66.16 -0.31 grade Djeno will slide to 184,000 b/d on six shipments in Erha Dated -0.50 65.00 65.06 -0.31 April. This is one cargo fewer than planned for March's Escravos Dated -0.65 64.85 64.91 -0.31 208,000 b/d. Forcados Dated +0.00 65.50 65.56 -0.31 Qua Iboe Dated -0.85 64.65 64.71 -0.31 One cargo of N'Kossa is scheduled for a total of 31,000 Usan Dated -0.60 64.90 64.96 -0.31 b/d, broadly unchanged on the month. The cargo is sched- Cabinda Dated +0.25 65.75 65.81 -0.31 uled to load on 22-23 April. The combined Djeno and N'Kossa Dalia Dated +0.10 65.60 65.66 -0.31 Girassol Dated +0.75 66.25 66.31 -0.31 tally of 215,000 b/d is the lowest planned export amount Hungo Dated -0.50 65.00 65.06 -0.31 since 2017. Kissanje Dated -0.35 65.15 65.21 -0.31 Congo's Opec+ production cap is 269,000 b/d for March. Mostarda Dated -0.45 65.05 65.11 -0.31 Nemba Dated -0.45 65.05 65.11 -0.31 The group will meet this week to decide on April quotas. Zafiro Dated +0.10 65.60 65.66 -0.31 In Chad, loadings of Doba have been scheduled flat on Jubilee Dated +0.45 65.95 66.01 -0.31 the month at 123,000 b/d in April, according to market Doba Dated +0.30 65.80 65.86 -0.31 participants. Djeno Dated -0.55 64.95 65.01 -0.31 Four cargoes of Chad's heavy sweet Doba are scheduled Nigerian official formula prices $/bl in April. Chinese company CNPC's local subsidiary CNPCIC Basis Jan Feb Mar will market three cargoes to load on 4-5, 18-19 and 25-26 Abo Dated +0.23 -0.11 -0.11 April. Taiwan's CPC is set to market a cargo loading on 11-12 Agbami Dated -0.89 -0.99 -0.99 April. Ajapa Dated +0.68 +0.25 +0.25 Aje Dated +0.33 +0.01 +0.01 In Cameroon, a cargo of Lokele has been scheduled for Akpo Dated -0.70 -1.08 -1.08 1-10 April. The last loading of the grade was exported to Amenam Dated -0.72 -0.67 -0.67 familiar destination Sarroch, according to data from Vortexa, Antan Dated +0.77 +0.15 +0.15 Asaramatoru Dated +0.25 -0.20 -0.20 where Italian refiner Saras operates a 300,000 b/d refinery. Bonga Dated +0.34 -0.03 -0.03 Indian refiner IOC was heard to have bought at least 2mn Bonny Light Dated +0.28 +0.01 +0.01 bl of Nigerian crude in its latest buy tender, which closed on Brass River Dated +0.16 -0.02 -0.02 25 February. The refiner bought a cargo of Bonny Light from EA Dated +1.50 +1.14 +1.14 Ebok Dated +1.63 +1.35 +1.35 shell and a parcel of Akpo from Total, traders said. IOC had Egina Dated +1.06 +0.70 +0.70 sought supplies loading on 11-20 April or arriving across 7-16 Eremor Dated +0.06 -0.65 -0.65 May. The results remained unconfirmed. Erha Dated +0.45 +0.06 +0.06 In Nigeria, local firm Seplat released its production tar- Escravos Dated +0.68 +0.25 +0.25 Forcados Dated +0.52 +0.11 +0.11 gets for 2021. the company aims to produce 48,000-55,000 Ima Dated -1.23 -1.56 -1.56 b/d of oil equivalent (boe/d) this year, similar to its 2020 Jones Creek Dated +0.52 +0.11 +0.11 output that rose by 10pc on the year. Obe Dated -0.02 -0.37 -0.37 Okono Dated -0.07 -0.40 -0.40 It reported working-interest production of 51,183 boe/d Okoro Dated +1.42 +1.36 +1.36 in 2020, within its guidance range and up by 10.1pc from Okwori Dated +0.81 +0.42 +0.42 46,498 boe/d in 2019. The rise, which came in a year of Okwuibome formula Dated +0.35 -0.08 -0.08 curtailed Nigerian output due to Opec+ cuts and in which Otakikpo Dated +0.33 +0.01 +0.01 Oyo Dated +1.16 +0.73 +0.73 demand slumped because of the Covid-19 pandemic, was Pennington Dated +0.19 -0.15 -0.15 mainly the result of contributions from recently-acquired Qua Iboe Dated +0.25 -0.08 -0.08 Eland assets. Ukpokiti Dated +0.08 -0.24 -0.24 The firm’s 2021 capex is for around $150mn, focusing on Usan Dated +0.08 -0.18 -0.18 Yoho Dated +0.30 -0.08 -0.08 gas projects and an exploration well. Zafiro* Dated +0.98 +0.34 +0.34 Premium for advanced pricing Dated +0.07 +0.07 +0.07 Premium for deferred pricing Dated +0.07 +0.07 +0.07 *Equatorial Guinea, priced by NNPC

Mideast Gulf

Traders were awaiting the release of Mideast Gulf formula Mideast Gulf $/bl prices, which may emerge after the Opec+ ministerial meet- Month Basis Diff Bid Ask ± ing on 4 March. Dubai May 63.99 64.09 -0.05 Oman May May* +1.30 64.18 64.28 -0.01 The premium of front-month April Dubai prices to the Murban May Adnoc +0.00 63.63 63.73 - third-month June contract was at 69¢/bl on average in Feb- Das May Adnoc +0.00 63.28 63.38 -0.90 ruary. This was wider by around 22¢/bl from the front-month Upper Zakum May Adnoc +0.00 63.63 63.73 -0.45 Umm Lulu Jun Adnoc +0.00 63.58 63.68 -0.90 to third-month spread in January, and the widest since the Qatar Land May QP +0.00 63.88 63.98 - Dubai backwardation averaged 76¢/bl in June 2020. Qatar Marine May QP +0.00 64.18 64.28 - The intermonth Dubai structure in February raised Qatar Al-Shaheen May May* +0.75 63.63 63.73 - expectations of an increase to April’s Mideast Gulf formula Banoco Arab Medium May Aramco +0.00 64.28 64.38 - Basrah Light fob Iraq† Apr Somo -1.00 63.66 63.76 - prices. The Dubai intermonth spreads are one factor that Basrah Medium fob Apr Somo +0.60 63.96 64.06 - producers like Saudi Arabia consider when setting official Iraq† prices. Basrah Heavy fob Iraq† Apr Somo +1.30 63.41 63.51 - DFC fob Qatar May May* +1.30 64.18 64.28 - But some refiners expect state-controlled Saudi Aramco LSC fob Qatar May May* +1.00 63.88 63.98 - to lift only the prices of its lighter sour crudes, leaving its *basis is Dubai swaps †Asia-Pacific destination-restricted cargoes heavier sour grades unchanged, due to the overall softer Differentials to Murban, 4:30pm Singapore $/bl demand for April-loading medium sour supplies. Month Basis Diff ± Yemen’s technical committee for crude oil marketing Mideast Gulf (YCOMD) issued a tender to sell 2mn bl of April-loading Dubai May May Mur- +0.36 +0.90 Oman May May Mur- +0.55 +1.14 Das May May Mur- -0.35 +0.10 Urals vs Oman $/bl Upper Zakum May May Mur- 0.00 +0.55 3 Umm Lulu May May Mur- -0.05 +0.10 Oman = 0 Qatar Land May May Mur- +0.25 +0.67 2 Qatar Marine May May Mur- +0.55 +0.72 Qatar Al-Shaheen May May Mur- 0.00 +0.30 1 Banoco Arab Medium May May Mur- +0.65 +0.92 Basrah Light fob Iraq Apr May Mur- +0.03 +0.39 0 Basrah Medium fob Iraq Apr May Mur- +0.33 +0.39 hh Basrah Heavy fob Iraq Apr May Mur- -0.22 +0.39 -1 DFC fob Qatar May May Mur- +0.55 +0.30 LSC fob Qatar May May Mur- +0.25 +0.30

-2 Asian-timestamp WTI Houston Apr May Mur- +0.35 +0.61

Russia Asia-Pacific -3 ESPO Blend May Mur- +1.20 +0.90 3 Sep 20 30 Oct 20 30 Dec 20 1 Mar 21 Sokol May Mur- +1.15 +0.30 Sakhalin Blend May Mur- +0.65 +0.30 Oman vs Dubai $/bl Substitute North Sea Dated May Mur- +1.45 +0.07 1.5 Dubai = 0 Differentials to DME Oman futures, 4:30pm Singapore $/bl Month Basis Diff ± 1.0 Murban May May DME -0.55 -1.14 Upper Zakum May May DME -0.55 -0.59 0.5 Das May May DME -0.90 -1.04 Dubai May May DME -0.20 -0.25 hh 0.0 Basrah Light fob Iraq† May May DME -0.52 -0.75 Basrah Heavy fob Iraq† May May DME -0.77 -0.75 Qatar Land May May DME -0.30 -0.47 -0.5 Qatar Marine May May DME 0.00 -0.42 Qatar Al-Shaheen May May DME -0.55 -0.84 -1.0 Banoco Arab Medium May May DME +0.10 -0.22 4 Sep 20 2 Nov 20 30 Dec 20 1 Mar 21 †Asia-Pacific destination-restricted cargoes

Mideast Gulf

Masila Blend. Bids must be submitted by 2 March and remain Mideast Gulf $/bl valid until 5 March. YCOMD last sold February-loading Masila Bid Ask ± Blend to Glencore at a 65¢/bl discount to North Sea Dated. Dubai forward, 4:30pm Singapore The front-month May Brent-Dubai EFS, or the spread be- May 63.99 64.09 -0.05 Jun 63.48 63.58 -0.10 tween Ice Brent futures and Dubai swaps, rose to a premium Jul 62.88 62.98 -0.16 of $2.66/bl, from $2.47/bl in the previous session. Aug 62.16 62.26 - May Dubai partials were heard to have traded at $64.15- Dubai forward, 4:30pm London May 63.34 63.42 -0.28 64.20/bl. Jun 62.82 62.92 -0.33 Jul 62.22 62.32 -0.39 Aug 61.50 61.60 - Dubai intermonths, 4:30pm Singapore May/Jun +0.51 +0.46 Jun/Jul +0.60 +0.14 Jul/Aug +0.72 +0.18 Dubai swaps, 4:30pm Singapore Apr 63.48 63.58 -0.10 May 62.88 62.98 -0.16 Jun 62.16 62.26 -0.24 Jul 61.53 61.63 - Cabinda vs Dubai month 1 $/bl Dubai swaps months are pricing months Dubai EFS, 4:30pm Singapore 3.0 May +2.66 -0.06 2.5 Dubai month 1 = 0 Jun +2.67 +0.20 Jul +2.59 +0.12 2.0 Ice Brent, 4:30pm Singapore 1.5 May +65.59 -0.76 Jun +64.88 -0.68 1.0 Jul +64.17 -0.75 Aug +63.57 -0.70 hh 0.5 Oman forward, 4:30pm Singapore 0.0 Dubai Diff Bid Ask ± -0.5 swaps May +1.30 May 64.18 64.28 -0.01 -1.0 Jun +1.37 Jun 63.53 63.63 -0.33 -1.5 Jul +1.36 Jul 62.89 62.99 - 3 Sep 20 30 Oct 20 30 Dec 20 1 Mar 21

Methodology $/bl

Dubai forward month calculator Dubai vs North Sea Dated, MEG freight $/bl Ice Brent month 1 May 65.59 Dubai EFS month 1 May - 2.66 Mideast Gulf-UKC 260,000t Dubai swap month 2* May = 62.93 Dubai vs North Sea Dated 2 Dubai forward month 3* Jul = 62.93 Dubai intermonth Jun/Jul + 0.60 1 Dubai forward month 2 Jun = 63.53 Dubai intermonth May/Jun + 0.51 0 Dubai forward month 1 May = 64.04 *Dubai swap month 2 = Dubai forward month 3 -1 Oman forward month calculator Dubai- Diff to Dubai Oman MOG Oman Dubai swaps forward -2 formula North Sea Dated = 0 spread swaps outright midpoint May +0.00 +1.30 +1.30 62.93 64.23 -3 Jun +0.00 +1.37 +1.37 62.21 63.58 Dec 20 Jan 21 Feb 21 Mar 21 Jul +0.00 +1.36 +1.36 61.58 62.94

Asia-Pacific

Australian independent Woodside is scheduled to load a Asia-Pacific $/bl cargo of Australian Pluto condensate in May. Basis Diff Bid Ask ± Pluto was last sold for March-loading to a trading firm at Minas ICP +1.00 63.34 63.44 -0.76 a premium of about $1/bl to North Sea Dated. May’s remain- Duri ICP +1.00 59.84 59.94 -0.76 ing Australian loading programmes, including for North West Cinta ICP +0.30 62.34 62.44 -0.76 Shelf (NWS), were expected later this week. Widuri ICP +0.30 62.54 62.64 -0.76 Taiwanese private-sector refiner Formosa did not award Senipah ICP +2.00 61.34 61.44 -0.76 its tender to buy 1mn bl of sweet crude for 30 April - 15 Attaka ICP +1.50 66.34 66.44 -0.76 May delivery, traders said. It was unclear why the tender Ardjuna ICP +0.00 60.59 60.69 -0.76 was not awarded although last week Formosa purchased an Belida ICP +1.00 62.29 62.39 -0.76 April-loading cargo of medium sour Qatari Al-Shaheen on the Sutu Den Dated* +2.50 67.98 68.08 -0.31 spot market. The wide premium of April Ice Brent futures Bach Ho Dated* +2.50 67.98 68.08 -0.31 to Mideast Gulf Dubai swaps in February made Mideast Gulf Tapis Dated* +1.60 67.08 67.18 -0.31 Kikeh Dated* +2.70 68.18 68.28 -0.31 grades more attractive for Asia-Pacific refiners compared Kimanis Dated* +2.50 67.98 68.08 -0.31 with Dated-linked Atlantic basin cargoes. Formosa plans on Labuan Dated* +2.70 68.18 68.28 -0.31 maintaining reduced runs at its 540,000 b/d Mailiao refinery Miri Light Dated* +2.60 68.08 68.18 -0.31 complex in the first half of this year. Kutubu Light Dated* +1.50 66.98 67.08 -0.31 Cossack Dated* +1.13 66.61 66.71 -0.31 North West Shelf Dated* +1.80 67.28 67.38 -0.31 Saharan Blend vs Tapis $/bl Ichthys Dated* +2.10 67.58 67.68 -0.31 Vincent Dated* +13.00 78.48 78.58 -0.31 2.0 Pyrenees Dated* +13.00 78.48 78.58 -0.31 1.0 Van Gogh Dated* +13.00 78.48 78.58 -0.31 Sudan 0.0 Basis Diff Bid Ask ± -1.0 Nile Blend Dated* +0.40 65.88 65.98 -0.31 Dar Blend Dated* +3.50 68.98 69.08 -0.31 hh -2.0 *when North Sea Dated is unavailable owing to a UK holiday, Substitute Dated will be used -3.0 Benchmarks Tapis = 0 -4.0 North Sea Dated 65.53 Substitute Dated 65.13 -5.0 Tapis Singapore close 66.73 30 Nov 20 30 Dec 20 29 Jan 21 1 Mar 21

Argus Condensate Index (ACI) $/bl Bonny Light vs Tapis $/bl ACI, Qatar DFC 64.69 1.0 Qatar DFC cfr Singapore 64.69 Tapis = 0 0.5 Australia North West Shelf (NWS) cfr Singapore 68.30 DFC cfr differential to NWS cfr -3.61 0.0 $/t -0.5 VLCC Qatar-Singapore freight 3.89 Aframax northwest Australia-Singapore freight 6.68 hh -1.0

-1.5 Argus Japanese Crude Cocktail Index $/bl Sep Oct Nov Dec Jan -2.0 Argus JCC (fixed) 46.2546 44.5366 42.3124 44.4645 -2.5 Argus JCC (preliminary) 50.0845 3 Sep 20 30 Oct 20 30 Dec 20 1 Mar 21

Asia-Pacific

Delivered China Delivered Northeast Asia $/bl Most grades weakened on a delivered ex-ship (des) Shandong Month Basis Diff Bid Ask ± basis. WTI del NE Asia Jun May Dubai +2.10 64.98 65.08 -0.7000 Overall crude supplies were deemed adequate in Shan- Delivered ex-ship Shandong prices $/bl dong, while demand remained soft. The market was also D i ff Grade Timing Basis Low High Price ± seeking price direction from the results of a refiner’s tender, Mid Jun Ice which should be known this week. ESPO Blend Apr +1.10 65.88 66.08 65.98 -0.54 Brent Djeno for delivery in April was offered at a premium to Jun Ice Djeno Apr +1.00 65.68 66.08 65.88 -0.44 June Ice Brent higher than $1.20/bl. April-delivery Tupi was Brent offered at above a $1.20/bl premium. Jun Ice Tupi Apr +1.10 65.88 66.08 65.98 -0.44 Brent Jul Ice Johan Sverdrup May +2.30 66.27 66.67 66.47 +0.15 Brent Jul Ice Oman May +1.20 65.07 65.67 65.37 -0.10 Brent

Mideast Gulf and Atlantic basin crude cfr Asia (fob plus freight) Singapore China Pyrenees $/bl Month $/bl ± $/bl ± Mideast Gulf 85 Dubai May 64.62 -0.10 64.89 -0.10 80 Oman May 64.80 0.14 65.07 0.14 Murban May 64.23 -1.00 64.49 -1.00 75 Upper Zakum May 64.25 -0.45 64.51 -0.45 70 Umm Lulu Jun 64.17 -0.90 64.43 -0.90 Qatar Marine May 64.79 -0.28 65.05 -0.28 65 Al-Shaheen May 64.26 -0.70 64.53 -0.70 Basrah Light Apr 64.28 -0.61 64.55 -0.61 hh 60 Basrah Medium Apr 64.59 -0.61 64.87 -0.61 55 Basrah Heavy Apr 64.06 -0.61 64.35 -0.61 West Africa 50 Cabinda Dtd 66.50 -0.96 66.84 -0.97 45 Girassol Dtd 67.01 -0.86 67.35 -0.88 Bonny Light Dtd 65.88 -1.16 66.22 -1.17 40 Qua Iboe Dtd 65.37 -1.66 65.70 -1.67 4 Sep 20 2 Nov 20 30 Dec 20 1 Mar 21 Escravos Dtd 65.59 -1.16 65.93 -1.17 North Sea Forties Dtd 67.97 -0.62 US Gulf coast WTI Prompt 65.88 -0.19 66.36 -0.19 Mars Apr 64.61 -0.70 65.13 -0.70 WCS Apr 61.09 -0.31 61.64 -0.31

US Gulf coast markers for Asia-Pacific, 4:30pm Singapore $/bl Minas $/bl WTI Houston, Asian timestamp Apr 64.03 70 May 63.73 WTI Midland, Asian timestamp 65 Apr 63.46 60 May 63.25 LLS, Asian timestamp 55 Apr 64.91 May 64.43 50 Mars, Asian timestamp hh 45 Apr 62.15 May 61.85 40 Differential to Dubai swaps Basis $/bl 35 WTI Houston, Asian timestamp (May) May +0.80 WTI Midland, Asian timestamp (May) May +0.32 30 LLS, Asian timestamp (May) May +1.50 4 Sep 20 2 Nov 20 30 Dec 20 1 Mar 21 Mars, Asian timestamp (May) May -1.08

Russia Asia-Pacific

India’s state-controlled ONGC sold late April-loading Sokol at Russia Asia-Pacific $/bl a firm premium to Dubai. Basis Diff Bid Ask ± ONGC sold the Sokol cargo loading on 27 April - 3 May, to ESPO Blend Apr Dubai swaps +1.35 64.83 64.93 -0.10 a trading firm via tender at a premium of around $2.60/bl to ESPO Blend* May Ice Brent -0.11 64.83 64.93 -0.10 front-line Dubai assessments in April, on a cfr STS Yosu basis. Sokol May Dubai swaps +1.90 64.78 64.88 -0.70 April-loading Sokol cargoes traded in February at premiums Sakhalin Blend May Dubai swaps +1.40 64.28 64.38 -0.70 of around $1.85-2.30/bl to Dubai. *Apr-loading cargoes Traders said the ONGC cargo was the last Sokol cargo Russia-Caspian crude cif basis Singapore for April-loading and may have prompted the buyer to pay a Bid Ask ± BTC Blend 67.78 67.8 4 -0.23 higher premium. It was unclear where the trading firm plans Urals (Black Sea) 65.84 65.90 -0.31 to take the cargo. South Korean refiner Hyundai was heard to have taken a cargo of ESPO Blend, at a premium to Dubai on a delivered Dirty freight rates from Kozmino (ESPO) 100,000t $/bl Korea basis. The cargo was purchased by Saudi Aramco's Rate trading arm ATC through a spot tender, to supply Hyundai, To Yosu 0.40 traders said. A Chinese oil firm may have sold the cargo al- To north China 0.51 though the deal was not confirmed. Aramco has a 17pc stake To Chiba 0.51 To Singapore 0.53 in Hyundai Oilbank. Hyundai is not a regular buyer of ESPO Blend, but lower prices for April-loading ESPO Blend relative to Mideast Gulf grades like light sour Murban could be one Urals NWE vs ESPO Blend $/bl reason for the purchase, traders said. 1 ESPO Blend = 0 Assessment rationale 0 ESPO Blend fob Kozmino (PA0007196) is assessed on the basis -1 of transactions, as and when these are identified in the market commentary, in accordance with the methodology. -2

hh -3

-4

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-6 3 Sep 20 30 Oct 20 30 Dec 20 1 Mar 21

ESPO Blend vs ANS USWC $/bl Azeri Light vs Tapis $/bl

4 3 ANS USWC = 0 3 2 1 2 0 1 hh -1 0 -2

-1 -3

-2 -4 28 Aug 20 27 Oct 20 28 Dec 20 1 Mar 21 30 Nov 20 30 Dec 20 29 Jan 21 1 Mar 21

Official prices

Official formula prices $/bl Official formula prices (continued) $/bl Basis Basis

Saudi Arabia Jan Feb Mar Dubai Mar Apr May Saudi Arabia to US: fob Ras Tanura Dubai fob Oman MOG OSP -0.25 -0.10 -0.15 Berri (Extra Light) ASCI +0.90 +1.10 +1.20 Yemen fob Salif/Ash Shihr Arab Light ASCI +0.55 +0.75 +0.85 Marib Light Dated na na na Arab Medium ASCI -0.15 +0.05 +0.15 Masila Dated na na na Arab Heavy ASCI -0.50 -0.30 -0.20 Iraq Jan Feb Mar Iraq to Europe Saudi Arabia to US: delivered US Gulf Kirkuk (fob Ceyhan) Dated +0.50 -0.30 +0.60 Berri (Extra Light) ASCI +2.20 +2.40 +2.50 Basrah Light Dated -0.50 -1.50 -0.60 Arab Light ASCI +1.85 +2.05 +2.15 Basrah Medium Dated -2.05 -3.15 -2.05 Arab Medium ASCI +1.15 +1.35 +1.45 Basrah Heavy Dated -3.30 -4.50 -3.50 Arab Heavy ASCI +0.80 +1.00 +1.10 Iraq to US Saudi Arabia to NW Europe: fob Ras Tanura* Kirkuk (fob Ceyhan) ASCI +1.00 +0.90 +0.95 Berri (Extra Light) Ice Brent Settlement -1.30 -1.80 -0.40 Basrah Light ASCI +0.00 +0.05 +0.25 Arab Light Ice Brent Settlement -1.40 -1.90 -0.50 Basrah Medium ASCI -0.90 -0.80 -0.50 Arab Medium Ice Brent Settlement -1.80 -2.30 -0.90 Basrah Heavy ASCI -1.75 -1.75 -1.50 Arab Heavy Ice Brent Settlement -2.20 -2.70 -1.30 Iraq to Asia-Pacific Saudi Arabia to Mediterranean: fob Sidi Kerir* Basrah Light Oman/Dubai avg +0.40 +1.10 +1.15 Berri (Extra Light) Ice Brent Settlement -0.20 -0.90 +0.50 Basrah Medium Oman/Dubai avg -0.65 -0.25 -0.15 Arab Light Ice Brent Settlement -0.30 -1.00 +0.40 Basrah Heavy Oman/Dubai avg -1.60 -1.40 -1.40 Arab Medium Ice Brent Settlement -0.90 -1.60 -0.20 *OSPs for pre-2021 export streams Arab Heavy Ice Brent Settlement -1.40 -2.10 -0.70 †Somo-issued December reference OSPs for its 2021 quality crude export streams Saudi Arabia to Mediterranean: fob Ras Tanura* Europe US Asia-Pacfic Berri (Extra Light) Ice Brent Settlement -0.90 -1.40 -0.10 Basrah Light Dated -0.60 ASCI +0.20 Oman/Dubai average -0.35 Arab Light Ice Brent Settlement -1.00 -1.50 -0.20 Basrah Medium Dated -1.90 ASCI -0.60 Oman/Dubai average -1.15 Arab Medium Ice Brent Settlement -1.60 -2.10 -0.80 Basrah Heavy Dated -3.00 ASCI -1.40 Oman/Dubai average -2.10 Arab Heavy Ice Brent Settlement -2.10 -2.60 -1.30 Saudi Arabia to Asia-Pacific: fob Ras Tanura Official selling prices $/bl Arab (Super Light) Oman/Dubai avg +1.25 +1.85 +1.85 Berri (Extra Light) Oman/Dubai avg +0.10 +0.60 +0.60 Abu Dhabi Jan Feb Mar Arab Light Oman/Dubai avg +0.30 +1.00 +1.00 Murban premium to Dubai +0.50 +0.75 +0.75 Arab Medium Oman/Dubai avg +0.35 +0.75 +0.75 Murban 55.27 61.61 na Das premium to Murban -0.35 -0.35 -0.35 Arab Heavy Oman/Dubai avg +0.10 +0.30 +0.30 Umm Lulu premium to Murban -0.05 -0.05 -0.05 Iran Jan Feb Mar Upper Zakum premium to Murban +0.00 +0.05 +0.00 Iran to Mediterranean: fob Sidi Kerir Qatar Jan Feb Mar Iranian Light Ice Bwave na na na Dukhan/Land premium to Oman/Dubai avg +0.00 +0.40 +0.35 Iranian Heavy Ice Bwave na na na Marine premium to Oman/Dubai avg +0.20 +0.70 +0.65 Foroozan Blend Ice Bwave na na na Oman Feb Mar Apr Iran to Mediterranean: fob Kharg Island Oman 50.00 54.79 60.85 Iranian Light Ice Bwave -1.65 -2.50 -1.65 Indonesia Nov Dec Jan Iranian Heavy Ice Bwave -2.90 -4.00 -3.20 Minas 42.80 49.47 54.41 Foroozan Blend Ice Bwave -2.90 -3.95 -3.15 Duri 47.17 53.35 58.91 Soroush Ice Bwave -6.60 -7.70 -6.90 Widuri 41.64 48.31 53.25 Nowruz Ice Bwave -6.60 -7.70 -6.90 Belida 39.68 47.70 53.00 Iran to NW Europe: fob Kharg Island Attaka 39.48 47.71 53.08 Iranian Light Ice Bwave -1.65 -2.50 -1.55 Ardjuna 35.34 45.91 51.00 Iranian Heavy Ice Bwave -2.80 -3.90 -3.00 Cinta 41.09 47.76 52.70 Senipah 43.00 47.86 54.73 Foroozan Blend Ice Bwave -2.80 -3.85 -2.95 Malaysia Nov Dec Jan Iran to Asia-Pacific: fob Kharg Island Tapis 41.26 49.26 55.83 Iranian Light Oman/Dubai avg +0.25 +0.80 +0.85 MCO Alpha Premium +0.00 +0.80 +2.25 Iranian Heavy Oman/Dubai avg -0.20 +0.05 +0.05 Labuan 42.66 50.66 57.09 Foroozan Blend Oman/Dubai avg -0.20 +0.00 +0.15 Miri 42.66 50.66 57.09 Soroush Oman/Dubai avg -3.40 -3.35 -3.35 Kikeh 42.66 50.66 57.09 Nowruz Oman/Dubai avg -3.40 -3.35 -3.35 Bintulu 40.46 48.46 56.49 Kuwait Jan Feb Mar Dulang 42.46 50.46 57.65 Kuwait to Asia-Pacific Brunei Oct Nov Dec Kuwait Oman/Dubai avg +0.25 +0.65 +0.65 Seria Light 39.08 41.29 49.29 Kuwait to US Champion 39.13 41.34 49.34 Kuwait ASCI +0.10 +0.05 +0.15 Reference prices $/bl Kuwait Arab Medium +0.25 +0.00 +0.00 Kuwait to Mediterranean Opec reference basket monthly avg Dec Jan Feb fob Kuwait Dated -0.40 -1.20 -0.20 Opec 49.17 54.38 61.05 fob Sidi Kerir Dated +0.30 -0.70 +0.40 Argus Japanese Crude Cocktail Index Oct Nov Dec Kuwait to northwest Europe Argus JCC 44.54 42.31 44.46 fob Kuwait Dated -1.35 -2.15 -0.95 The Argus Japanese Crude Cocktail Index is created by Argus based on data pub- *months prior to July were priced against Ice Bwave lished by the Customs and Tariff Bureau of Japan’s Ministry of Finance.

US Gulf Coast and Midcontinent

WTI $/bl WTI formula WTI formula Roll to next Timing Low High basis price basis MTD month

WTI Cushing Apr 60.62 60.66 60.64 61.07 -0.22 WTI Cushing May 60.40 60.44 60.42 -0.46 WTI Cushing Jun 59.94 59.98 -0.58 WTI Cushing Jul 59.36 59.40 Timing Price WTI Nymex spread CMA Nymex Apr 60.24 +0.40 CMA Nymex May 59.79 +0.63 CMA Nymex Jun 59.21 CMA Nymex Jul 58.50 D i ff Diff MTD MTD Weighted Timing Basis Diff low Diff high weighted weighted Low High weighted average average average average Argus AGS Marker Apr 62.02 62.07 62.03 62.48 Argus AGS Apr Apr WTI +1.38 +1.43 +1.40 +1.40 62.02 62.07 62.04 WTI Houston Apr Apr WTI +1.40 +1.45 +1.42 +1.42 62.04 62.09 62.06 WTI Houston May May WTI +1.40 +1.45 +1.43 +1.41 61.82 61.87 61.85 WTI Midland Apr Apr WTI +0.85 +0.95 +0.90 +0.88 61.49 61.59 61.54 WTI Midland May May WTI +0.90 +0.95 +0.93 +0.92 61.32 61.37 61.35 WTI Midland Enterprise Apr Apr WTI +0.85 +0.95 +0.90 +0.88 61.49 61.59 61.54 WTI diff to CMA Nymex Apr CMA +0.40 +0.43 +0.42 +0.46 WTI postings-plus Apr Postings +3.78 +3.81 +3.80 +3.84

Midcontinent $/bl D i ff Diff MTD Weighted Timing Basis Diff low Diff high weighted weighted Low High average average average

Bakken Clearbrook Apr CMA Nymex +1.05 +1.20 61.29 61.44 Bakken Cushing Apr Apr WTI +0.45 +0.65 +0.55 +0.55 61.09 61.29 61.19 White Cliffs Apr Apr WTI -0.30 -0.20 -0.25 -0.25 60.34 60.44 60.39 Niobrara Apr Apr WTI +0.35 +0.60 +0.48 +0.49 60.99 61.24 61.12 WCS Cushing Apr CMA Nymex -3.75 -3.65 -3.71 -3.74 56.49 56.59 56.53

Texas $/bl D i ff Diff MTD Weighted Timing Basis Diff low Diff high weighted weighted Low High average average average

WTL Midland Apr Apr WTI +0.35 +0.70 +0.53 +0.49 60.99 61.34 61.17 Bakken Beaumont/ CMA Nymex + Argus Apr +1.30 +1.40 +1.35 +1.28 61.96 62.06 62.01 Nederland WTI diff to CMA WTS Apr Apr WTI +0.00 +0.10 +0.05 +0.28 60.64 60.74 60.69 WTS May May WTI +0.05 +0.55 +0.30 +0.34 60.47 60.97 60.72 Southern Green Canyon Apr Apr WTI -1.50 -1.10 -1.30 -1.28 59.14 59.54 59.34 WCS Houston Apr CMA Nymex -2.85 -2.65 -2.75 -2.88 57.39 57.59 57.49

Louisiana $/bl D i ff Diff MTD Weighted Timing Basis Diff low Diff high weighted weighted Low High average average average

LLS Apr Apr WTI +2.15 +2.35 +2.35 +2.33 62.79 62.99 62.99 LLS May May WTI +2.10 +2.25 +2.18 +2.13 62.52 62.67 62.60 HLS Apr Apr WTI +1.95 +2.05 +2.00 +1.90 62.59 62.69 62.64 Thunder Horse Apr Apr WTI +1.40 +1.50 +1.45 +1.28 62.04 62.14 62.09 Bonito Apr Apr WTI -0.10 +0.40 +0.15 -0.09 60.54 61.04 60.79 Poseidon Apr Apr WTI -1.00 -0.70 -0.85 -1.06 59.64 59.94 59.79 Mars Apr Apr WTI -0.20 +0.00 -0.09 -0.28 60.44 60.64 60.55 Mars May May WTI -0.05 +0.05 -0.05 -0.28 60.37 60.47 60.37 LOOP Sour Apr Apr WTI -0.65 -0.25 -0.45 -0.73 59.99 60.39 60.19

US Gulf Coast and Midcontinent

US Gulf coast crude prices mostly firmed against the US light Argus Sour Crude Index (ASCI™) $/bl sweet benchmark at Cushing, Oklahoma, with Louisiana Month Basis Diff Price sours leading the way. ASCI Apr Apr WTI -0.09 60.55

April Mars was up by 37¢/bl against Cushing, firming to a CMA Nymex + Argus ASCI 2 Apr -0.09 60.57 9¢/bl discount. WTI diff to CMA May Mars also traded at a 5¢/bl discount to Cushing, which strengthened the grade by 45¢/bl against the light sweet benchmark. Thunder vs ASCI, Thunder vs WTI $/bl Prompt Thunder Horse traded at a $1.45/bl premium to Thunder Horse vs ASCI (5 day MA) Cushing, firming by 35¢/bl. Thunder Horse vs WTI (5 day MA) In the light sweet market, April LLS rose by 5¢/bl against 2.5 Cushing, up to a $2.35/bl premium. 2 April HLS was up by 20¢/bl against Cushing, rising to a $2/bl premium. 1.5

April WTI Houston was established at a $1.42/bl premium hh 1 to Cushing, unchanged from Friday’s premium. The Argus AGS Marker was down by 9¢/bl, falling to 0.5 $62.03/bl. 0 Bakken Beaumont-Nederland was up by 9¢/bl against Cushing, rising to a $1.58/bl premium. -0.5 5 Jun 20 1 Sep 20 30 Nov 20 1 Mar 21 Further inland, Bakken Cushing traded at a 55¢/bl premium to the light sweet benchmark, unchanged from Friday’s premium. Mars vs WTI $/bl

WCS and Cold Lake traded in the Cushing market estab- 2 lished the WCS Cushing discount to the CMA Nymex basis at WTI = 0 $3.71/bl, firming by 5¢/bl from Friday. 1.5 Crude drilling activity in Alberta was down by only four wells in December compared to the same month in 2019, as 1 crude price gains accelerated the recovery from the pan- 0.5 demic. hh A total of 160 wells were drilled in December, compa- 0 rable to the 164 drilled in the same month in 2019 and 166 drilled in December 2018. -0.5 The Houston Ship Channel and Port of Houston reopened to inbound vessel traffic at 1:40pm ET, according to the US -1 31 Aug 20 28 Oct 20 29 Dec 20 1 Mar 21 Coast Guard, after reopening to outbound traffic at 9:30am ET. The channel and port closed fully Sunday at 9:30pm because of dense fog in the area. Poseidon was assessed to reflect the midpoint of bids and offers against Mars, with the bids and offers applied to the Assessment rationale Mars range. The minimum volume was met and volume-weighted average Southern Green Canyon was assessed at the midpoint of bids calculated according to the methodology for LLS, Mars, WCS and offers. Cushing, WTI Diff to CMA Nymex, WTI Houston, WTI Midland WCS Houston was assessed to reflect feedback on the Enterprise, WTI Midland and WTS. grade's differential to the CMA Nymex basis. The Bakken at Clearbrook assessment was set on the basis WTL Midland was assessed to reflect the midpoint of bids of fresh trade. Bakken at Clearbrook sold at a premium of and offers against WTI Midland, with the bids and offers ap- $1.05-$1.20/bl. plied to the WTI Midland range.

US waterborne

Dirty freight rates $/t US Gulf coast waterborne $/bl Timing Basis Diff low/high Low/High

WTI fob Houston Prompt Apr CMA Nymex +1.58/+1.98 61.82-62.22 USGC-east coast Canada Prompt Apr WTI Houston -0.24/+0.16 70,000t 15.16 USGC-Europe Prompt Jun Ice -1.20/-0.80 70,000t 20.84 Bakken fob Beaumont/ Prompt Apr CMA Nymex +1.38/+1.78 61.62-62.02 Nederland Prompt Apr WTI Houston -0.44/-0.04 USGC-China Prompt Jun Ice -1.40/-1.00 270,000t 16.30 130,000t 26.92 US Gulf coast prices vs global benchmarks $/bl USGC/Carib-Singapore Timing Basis Price Differential 130,000t 23.08 WTI Houston May May Dubai swaps* 63.73 +0.80 Apr Jul Ice Brent -0.27 Freight rate $ lumpsum Apr Jul Dubai -0.87 Route Daily Worldscale WTI Midland May May Dubai swaps* 63.25 +0.32 Apr Jul Ice Brent -0.79 USGC Aframax reverse lightering 295,000 Apr Jul Dubai -1.39 LLS May May Dubai swaps* 64.43 +1.50 US light sweet waterborne crude discounts to Ice Brent were Apr Jul Ice Brent +0.66 roughly steady this session as offers surfaced for April load- Apr Jul Dubai +0.06 Mars May May Dubai swaps* 61.85 -1.08 ing cargoes becoming prompt on Friday. Apr Jul Ice Brent -1.78 A 720,000 bl cargo of Midland-sourced WTI for loading Apr Jul Dubai -2.38 between 11-30 April was heard offered at an 80¢/bl discount Bakken Beaumont/ Apr Jul Ice Brent -0.32 to June Ice Brent this session, though buyer interest could Nederland not be confirmed at that level. The low side of WTI fob Apr Jul Dubai -0.92 Houston was assessed at a $1.20/bl discount to the European Argus uses today’s US pipeline outright prices at Nymex settlement to calculate spreads to today’s Ice Brent settlement and Argus Dubai prices three marker, based on the prior day’s spread to pipeline WTI months forward, to account for travel time from the US to Asia-Pacific. Houston. *Outright prices are calculated by applying the previous day’s US pipeline differentials to today’s Singapore Nymex WTI 4.30pm timestamp, to then April WTI Houston was unchanged at a $1.42/bl volume- calculate spreads to Dubai swaps at that timestamp. weighted average premium to the US light sweet crude benchmark at Cushing, Oklahoma, or roughly $1/bl under The midpoint of Bakken fob Beaumont was meanwhile June Ice Brent. assessed at a $1.20/bl discount the international benchmark Separately, a cargo of Midland-sourced WTI for loading to maintain a roughly 20¢/bl discount to waterborne WTI. in March was heard offered at a $1.30/bl discount to May Ice Plains All American Pipeline has lifted a force majeure on Brent, equivalent to a roughly 65¢/bl discount to June Ice 15 Texas crude pipelines and gathering systems which had Brent. been in place since mid-February following severe winter A cargo of March loading Eagle Ford crude was mean- weather and power outages. while heard offered this session at a $1.60/bl discount to May The company has resumed normal operations on the Ice, equivalent to a roughly $1/bl discount to June Ice Brent. pipeline systems, Plains said in a notice to shippers last ses-

Anticipated US crude export cargoes — 15-45 days forward Approximate Tanker name volume '000 Estimated grade Load window Load port Chartered destination ETA bl

Hunter Freya 2,100 WTI 26 Mar tbd Asia-Pacific tbd New Vitality 2,100 WTI 25 Mar tbd China 19 May New Achievement 2,000 Mars 21 Mar LOOP Ningbo, China 15 May Land. Majesty 2,100 WTI 20 Mar tbd Ningbo, China 14 May

US waterborne sion. US west coast pipeline, 26 Feb $/bl The force majeure was lifted for: the Cactus pipeline, Basis Diff to Ice Brent Outright the Alpha Crude Connector, Sunrise 2 pipeline, the Basin Light postings avg Apr -0.98 65.15 system, the Iatan gathering system, the McCamey pipeline, Heavy postings avg Apr -5.08 61.05 the Mesa pipeline, the Midland South pipeline, the Spraberry pipeline system, the Pinon pipeline, the Scurry pipeline, the US west coast waterborne $/bl Mesa pipeline, the Permian basin system, the west Texas Timing Basis Diff low/high Low/High gathering system and the Wolverine gathering system. CMA ANS del Apr +3.13/+3.23 63.37-63.47 Separately, offers are due 9 March for a term tender by Nym Sri Lanka's state-owned refiner Ceypetco to buy 8.4mn bl Apr CMA Ice +0.35/+0.45 of light crude for delivery to the port of Colombo between ANS del concurrent Apr Apr WTI +3.13/+3.23 63.77-63.87 June 2021 and February 2022 in which Midland-sourced WTI will compete with Algerian Saharan Blend, Abu Dhabi Das ANS del USWC monthly volume-weighted average $/bl Blend and Murban crude. Basis Diff Ceypetco lists three possible options for potential sell- Jan Ice CMA -0.50 ers in its latest term tender, with the first being 12 ship- Feb Ice CMA +0.32 ments each of 700,000 bl of Murban. The second option is a Mar Ice CMA +0.35 Apr MTD Ice CMA +0.28 combination of nine 700,000 bl cargoes of Murban and three 700,000 bl cargoes of either Saharan Blend or WTI. The third option calls for eight 700,000 bl cargoes of Das ANS vs Ice $/bl Blend crude and four 700,000 bl cargoes of either Saharan Blend or WTI. 1.0 Ice = 0 In shipping news, Indian private-sector refiner Nayara 0.5 placed the Suezmax Silverway on subjects to load a possible cargo of WCS or Cold Lake crude from Beaumont, Texas, to 0.0 western India around 14 March, according to this morning’s -0.5 fixture reports. hh -1.0

-1.5 Assessment rationale The ANS assessment against CMA Nymex WTI was adjusted -2.0 to maintain the spread to CMA Ice Brent established when -2.5 the grade last traded. 31 Aug 20 28 Oct 20 29 Dec 20 1 Mar 21

ANS vs WTI $/bl

5 WTI = 0 4

hh 2

0 31 Aug 20 28 Oct 20 29 Dec 20 1 Mar 21

Latin America

Argentinian heavy sweet Escalante firmed Monday on the South America $/bl back of a recent sale and following higher prices for similar- Timing Basis Diff low/high Low/High quality African crudes. Colombia April-loading Escalante was assessed at between $1.65/ Vasconia Prompt Jun WTI +1.06/+1.56 61.02-61.52 bl and $2.15/bl over June Ice Brent. The price climb mirrors Jun Ice -2.00/-1.50 that of Angolan heavy sweet Dalia crude which firmed in the Castilla Prompt Jun WTI -0.44/+0.06 59.52-60.02 last two weeks over its benchmark North Sea Dated. Jun Ice -3.50/-3.00 Mexico’s March formula adjustments went into effect Argentina Escalante Prompt Jun WTI +4.71/+5.21 64.67-65.17 Monday with the K-factor for heavy sour bellwether Maya Jun Ice +1.65/+2.15 crude to the US Gulf coast, Americas' Atlantic coast and the Caribbean widening to a $3.85/bl discount in March from a Mexico $/bl $3.35/bl discount in February. Maya to the US west coast and Timing Basis Diff Price

Americas' Pacific coast will deepen to a $4.65/bl discount Maya from a $4.15/bl discount. Excluding USWC Mar Apr Nymex -1.86 58.78 Maya bound for Europe, India and the Middle East will USWC Mar Apr Nymex -2.66 57.98 narrowed to a $4.75/bl discount in March from a $5.10/bl Europe Mar May Dated Brent -6.59 58.94 discount in February, while Maya cargoes to Asia-Pacific will Asia-Pacific Mar May Dubai -3.50 60.54 narrowed slightly by 5¢/bl to a $3.60/bl discount. Isthmus Ecuadorean state-owned PetroEcuador will next session Excluding USWC Mar Apr Nymex -0.06 60.58 USWC Mar Apr Nymex -0.96 59.68 close a pair of tenders offering medium sour Oriente and Europe Mar May Dated Brent -4.79 60.74 heavy sour Napo crude for March-loading from the port of Asia-Pacific Mar May Dubai -1.55 62.49 Esmeraldas. Olmeca The South American company was heard offering four Americas Mar Apr Nymex +0.69 61.33 360,000 bl cargoes of Oriente and two 360,000 bl cargoes of Europe Mar May Dated Brent -4.24 61.29 Napo. This will be the third consecutive month that PetroEc- uador issues tenders for the crudes whose spot volumes have Mexico K-factors $/bl until recently been scarce amid oil-backed agreements with Timing K-factor Asia-Pacific companies. Maya USGC Mar -3.85 Separately, shipping fixtures Monday indicate ExxonMo- Maya USWC Mar -4.65 bil plans to charter the Suezmax Front Coral from Guyana Maya Europe Mar -4.75 Maya Asia Mar -3.60 to the Caribbean or the US Gulf coast. Brazilian state-run Isthmus USGC Mar -2.05 Petrobras placed on subjects the Suezmax Marlin Somerset Isthmus USWC Mar -2.95 from Brazil to Singapore or other options starting 14 March. Isthmus Europe Mar -2.95 The company also fixed the Suezmax Advantage Sun from Isthmus Asia Mar -1.65 Brazil to Europe or Chile starting 17 March. Olmeca USGC Mar -1.30 Olmeca Europe Mar -2.40

Castilla vs WTI $/bl Maya vs Vasconia $/bl

0.5 -0.5 WTI = 0 Vasconia = 0 0 -1 -0.5

-1 -1.5

hh -1.5 hh -2 -2 -2.5 -2.5

-3 -3 31 Aug 20 28 Oct 20 29 Dec 20 1 Mar 21 31 Aug 20 28 Oct 20 29 Dec 20 1 Mar 21

Canada

Canada domestic $/bl Diff Diff MTD Weighted Timing Basis Diff low Diff high weighted weighted Low High average average average

Syncrude (SSP) Apr CMA Nym -0.25 +0.05 -0.10 -0.10 59.99 60.29 60.14 WCS Apr CMA Nym -11.50 -11.00 -11.25 -11.25 48.74 49.24 48.99 WCS Cushing Apr CMA Nym -3.75 -3.65 -3.71 -3.74 56.49 56.59 56.53

Canada domestic $/bl Canada waterborne prices $/bl

Timing Basis Diff low/high Low/High Timing Basis Diff low/high Low/High

Condensate Apr CMA Nym +1.35/+1.85 61.59/62.09 Hibernia Dated North Sea -0.80/-0.30 64.73/65.23

MSW Apr CMA Nym -2.15/-1.65 58.09/58.59 Terra Nova Dated North Sea -0.90/-0.40 64.63/65.13

LSB Apr CMA Nym -2.15/-1.65 58.09/58.59 Canadian Synthetic vs LLS month 2 $/bl LLB Apr CMA Nym -11.25/-9.35 48.99/50.89 -2 LLS month 2 = 0 Heavy sour crude was down slightly while bidding interest -3 returned to condensate markets in the first session of the April trade window. -4 April-delivery of Western Canadian Select (WCS) at hh Hardisty, Alberta, saw its outright price slip below $50/bl for -5 the first time in four sessions, settling at an implied $48.99/ bl. This is down by $1.10/bl day-over-day as both a widening -6 differential and sliding basis weighed on Canada’s heavy sour benchmark. -7 The differential for April WCS was assessed 30¢/bl lower 26 Aug 20 26 Oct 20 29 Dec 20 1 Mar 21 to start the week as liquidity returned to the market. WCS’ discount of $11.25/bl to the April Nymex WTI CMA is the strongest start to the April trade cycle since 2019 when a Drilling activity had been on the upswing since hitting $10.50/bl discount was recorded. The current outright price a record low of only four wells drilled in April. But the gap remains more than $3/bl higher compared to that time. between previous years remained wide, peaking in August Condensate at Edmonton, Alberta, was assessed at a when drilling typically starts to pick up. Only 299 wells $1.60/bl premium to the April CMA. This is the highest dif- drilled that month, 269 fewer than in August 2019. ferential since 10 March last year and the first time over $1/ There were 70 wells targeting bitumen in December, up bl since October. by 64 from December 2019 but down from 108 in November. South of the Border, Bakken at Clearbrook, Minnesota, traded between a $1.05-1.20/bl premium to the April basis. At least 5,000 b/d traded at this level which is the highest Assessment rationale differential since May of last year. The minimum volume was met and volume-weighted average In upstream news, crude drilling activity in Alberta was calculated according to the methodology for WCS Houston. down by only four wells in December compared to the same WCS Houston was assessed to reflect feedback on the month in 2019, as crude price gains accelerated the recovery grade's differential to the CMA Nymex basis. from the pandemic. A total of 160 wells were drilled in December, compa- rable to the 164 drilled in the same month in 2019 and 166 drilled in December 2018. Drilling was down by 15 wells from November, not uncommon as activity typically slumps to close the year, according to statistics from the Alberta Energy Regulator (AER) dating back to 2000.

Argus month average prices: US domestic pipeline Mar 21 trade month Code Trade day average Price Differential to WTI

WTI formula basis for grades Cushing, Oklahoma PA0003373 57.754 09 WTI P-Plus Cushing, Oklahoma PA0003361 +3.55409 WTI diff to CMA Nymex Cushing, Oklahoma PA0003360 +0.17409 WTI Cushing Cushing, Oklahoma PA0002668 57.754 09 AGS Marker ECHO Houston PA0030328 59.17864 AGS ECHO Houston PA0030325 59.16364 +1.40955 Bakken Cushing Cushing, Oklahoma PA0019565 58.25591 +0.50182 Bakken Beaumont/Nederland Beaumont/Nederland, Texas PA0022255 +1.25364 White Cliffs Cushing, Oklahoma PA0019571 57.5136 4 -0.24045 Niobrara Cushing, Oklahoma PA0019568 58.23227 +0.47818 WTI Midland Midland, Texas PA0003358 58.74045 +0.98636 WTL Midland Midland, Texas PA0026294 58.34545 +0.59136 WTI Midland Enterprise Midland, Texas PA0027468 58.74045 +0.98636 WTI Houston Magellan East Houston, Texas PA0016059 59.18591 +1.43182 Bonito St James, Louisiana PA0003359 58.41955 +0.66545 Thunder Horse Clovelly, Louisiana PA0005612 58.99409 +1.24000 HLS Empire, Louisiana PA0003356 59.76591 +2.01182 LLS St James, Louisiana PA0003364 59.88682 +2.13273 Mars Clovelly, Louisiana PA0003362 58.14682 +0.39273 Poseidon Houma, Louisiana PA0003357 57.35818 -0.39591 Southern Green Canyon Texas City/Nederland, Texas PA0003968 57.38545 -0.36864 WTS Midland, Texas PA0003363 58.68636 +0.93227 LOOP Sour Clovelly, Louisiana PA0020616 57.63318 -0.12091

Differential to CMA Nymex

Bakken (US pipeline schedule) Clearbrook, Minnesota PA0009012 -1.14659 WCS Houston Houston area PA0018492 -2.21000 WCS Cushing Cushing, Oklahoma PA0019353 -3.32136

Canadian pipeline Mar 21 trade month Cumulative trade month weighted average

Syncrude (SPP) Pembina AOSP at Edmonton PA0008308 0.00 WCS Husky at Hardisty PA0008320 -12.70

Differential to CMA Nymex

Bakken (Canadian Pipeline Schedule) Clearbrook, Minnesota PA0009012 -1.68 Note: This table is licensed for use by authorized users and may not be redistributed without seeking additional licenses. By reading this publication you agree that you will not copy or reproduce any part of its contents (including, but not limited to, single prices or any other individual items of data) in any form or for any purpose whatsoever without the prior written consent of the publisher. The data and other information published in the above table are provided on an “as is” basis. Argus makes no warranties, express or implied, as to the accuracy, adequacy, timeliness, or completeness of the data or fitness for any particular purpose. Prices included in this table are subject to change or correction after publication. The averages are trade-day averages of prices published for the trade month listed. Argus only publishes on days when the New York Mercantile Exchange is open for trade, and so only those days are averaged. Weekends and holidays are not included. The trade month is the period beginning with the 26th day of the month that is two months prior to the month of delivery through and including the 25th day of the month immediately prior to the month of delivery. Should the first day of the trade month fall on a day when the market is closed, the trade month will begin on the first trading day thereafter. Should the last day of the trade month fall on a day when the market is closed, the trade month will end on the last trading day prior. The absolute prices for Argus US domestic crude grades are calculated using the Argus “WTI Formula Basis” value. The “WTI Formula Basis” average plus the crude grade’s differential average equals the absolute price for the crude grade. The “WTI Formula Basis” price is an average of the Nymex WTI settlement price from the 26th of the month up to and including futures expiry, and the Argus WTI Cushing price from the day following futures expiry up to and including the 25th of the month. Each price component is rounded independently. Discrepancies due to this independent rounding must be accommodated by the user.

Monthly data corrections Publication Published Corrected Published Corrected Grade Location PA code date diff diff price price

Bakken Beaumont/Nederland Beaumont/Nederland, Texas PA0022255 25 Feb 64.76 64.77 Bakken Cushing Cushing, Oklahoma PA0019565 25 Feb +0.48 +0.46 64.03 64.01 Mars Clovelly, Louisiana PA0003362 25 Feb -0.20 -0.18 63.35 63.37 Niobrara Cushing, Oklahoma PA0019568 25 Feb +0.46 +0.45 64.01 64.00 WTI diff to CMA Nymex Cushing, Oklahoma PA0003360 25 Feb +0.07 +0.08 WTI Midland Midland, Texas PA0003358 25 Feb +0.83 +0.79 64.38 64.34 WTI P-Plus Cushing, Oklahoma PA0003361 25 Feb +3.45 +3.46 WTL Midland Midland, Texas PA0026294 25 Feb +0.48 +0.44 64.03 63.99 WTS Midland, Texas PA0003363 25 Feb +0.08 +0.04 63.63 63.59 White Cliffs Cushing, Oklahoma PA0019571 3 Feb -0.18 -0.20 55.51 55.49 WCS Houston Houston area PA0018492 2 Feb -1.98 -1.99 52.56 52.55

Deals done

Argus AGS deals done $/bl Adjusted Differential Reported AGS index AGS Marker Volume Location basis differential price differential price b/d bl

ECHO Houston 61.53 +1.35 61.53 2,000 ECHO Houston 61.53 +1.35 61.53 3,000 Magellan East Houston Apr WTI +1.40 +1.38 62.02 1,000 Magellan East Houston Apr WTI +1.40 +1.38 62.02 1,000 Magellan East Houston Apr WTI +1.40 +1.38 62.02 2,000 Magellan East Houston Apr WTI +1.45 +1.43 62.07 5,000 Magellan East Houston Apr WTI +1.45 +1.43 62.07 2,000 Magellan East Houston Apr WTI +1.40 +1.38 62.02 2,000 Magellan East Houston Apr WTI +1.40 +1.38 62.02 3,000 Magellan East Houston Apr WTI +1.40 +1.38 62.02 1,000 Magellan East Houston Apr WTI +1.40 +1.38 62.02 2,000 Magellan East Houston Apr WTI +1.40 +1.38 62.02 2,000 *Table shows deals as reported and also normalized values for the calculation of VWAs

North America pipeline deals done Trade Basis Grade Location Differential basis Differential Price $/bl Volume b/d month month

WTI Cushing Oklahoma Apr Apr CMA Nymex trade days +0.40 1,000 WTI Cushing Oklahoma Apr Apr CMA Nymex trade days +0.40 3,000 WTI Cushing Oklahoma Apr Apr CMA Nymex trade days +0.40 4,000 WTI Cushing Oklahoma Apr Apr CMA Nymex trade days +0.40 5,000 WTI Cushing Oklahoma Apr Apr CMA Nymex trade days +0.40 9,533 WTI Cushing Oklahoma Apr Apr CMA Nymex trade days +0.41 2,000 WTI Cushing Oklahoma Apr Apr CMA Nymex trade days +0.42 2,000 WTI Cushing Oklahoma Apr Apr CMA Nymex trade days +0.42 6,000 WTI Cushing Oklahoma Apr Apr CMA Nymex trade days +0.43 2,000 WTI Cushing Oklahoma Apr Apr CMA Nymex trade days +0.43 5,000 WTI Cushing Oklahoma Apr Apr CMA Nymex trade days +0.43 5,000 WTI Cushing Oklahoma Apr Apr CMA Nymex trade days +0.43 5,000 WTI Cushing Oklahoma Apr Apr CMA Nymex trade days +0.43 5,000 WTI Cushing Oklahoma Apr Apr CMA Nymex trade days +0.43 6,000 WTI Cushing Oklahoma Apr Apr CMA Nymex trade days +0.43 10,000 WTI Midland Enterprise Apr Apr WTI +0.85 2,000 WTI Midland Enterprise Apr Apr WTI +0.85 2,000 WTI Midland Enterprise Apr Apr WTI +0.85 3,000 WTI Midland Enterprise Apr Apr WTI +0.85 3,000 WTI Midland Enterprise Apr Apr WTI +0.85 4,000 WTI Midland Enterprise Apr Apr WTI +0.85 5,000 WTI Midland Enterprise Apr Apr WTI +0.90 1,000 WTI Midland Enterprise Apr Apr WTI +0.90 2,000 WTI Midland Enterprise Apr Apr WTI +0.90 2,000 WTI Midland Enterprise Apr Apr WTI +0.90 2,000 WTI Midland Enterprise Apr Apr WTI +0.90 2,000 WTI Midland Enterprise Apr Apr WTI +0.90 2,000 WTI Midland Enterprise Apr Apr WTI +0.90 2,000 WTI Midland Enterprise Apr Apr WTI +0.90 2,000 WTI Midland Enterprise Apr Apr WTI +0.90 2,000 WTI Midland Enterprise Apr Apr WTI +0.90 2,000 WTI Midland Enterprise Apr Apr WTI +0.90 3,000 WTI Midland Enterprise Apr Apr WTI +0.90 5,000 WTI Midland Enterprise Apr Apr WTI +0.95 4,000 WTI Midland Enterprise Apr Apr WTI +0.95 1,000 WTI Midland Enterprise Apr Apr WTI +0.95 1,000 WTI Midland Enterprise Apr Apr WTI +0.95 1,000 WTI Midland Enterprise Apr Apr WTI +0.95 2,000

Deals done (continued)

North America pipeline deals done Trade Basis Grade Location Differential basis Differential Price $/bl Volume b/d month month

WTI Midland Enterprise Apr Apr WTI +0.95 2,000 WTI Midland Enterprise Apr Apr WTI +0.95 2,000 WTI Midland Enterprise Apr Apr WTI +0.95 2,000 WTI Midland Enterprise Apr Apr WTI +0.95 2,000 WTI Midland Enterprise Apr Apr WTI +0.95 2,000 WTI Midland Enterprise Apr Apr WTI +0.95 3,000 WTI Midland Enterprise Apr Apr WTI +0.95 3,000 Bakken Beaumont / Nederland Apr Apr CMA Nymex + Argus WTI Diff to CMA +1.35 3,000 Bakken Beaumont / Nederland Apr Apr CMA Nymex + Argus WTI Diff to CMA +1.35 3,905 Bakken Cushing Oklahoma Apr Apr WTI +0.55 1,000 Bakken Cushing Oklahoma Apr Apr WTI +0.55 5,000 Cold Lake Cushing Cushing Oklahoma Apr Apr CMA Nymex trade days -3.75 2,867 Cold Lake Cushing Cushing Oklahoma Apr Apr CMA Nymex trade days -3.65 3,333 HLS Empire Louisiana Apr Apr WTI +2.00 1,000 HLS Empire Louisiana Apr Apr WTI +2.00 2,000 LLS St. James Louisiana Apr Apr WTI +2.35 5,000 Mars Clovelly Louisiana Apr Apr WTI -0.20 1,000 Mars Clovelly Louisiana Apr Apr WTI -0.20 1,000 Mars Clovelly Louisiana Apr Apr WTI -0.15 2,000 Mars Clovelly Louisiana Apr Apr WTI -0.10 10,000 Mars Clovelly Louisiana Apr Apr WTI -0.05 3,000 Mars Clovelly Louisiana Apr Apr WTI +0.00 1,000 Mars Clovelly Louisiana Apr Apr WTI +0.00 2,000 Mars Clovelly Louisiana May May WTI -0.05 4,000 Thunder Horse Clovelly Louisiana Apr Apr WTI +1.45 3,000 Thunder Horse Clovelly Louisiana Apr Apr WTI +1.45 7,000 Thunder Horse Clovelly Louisiana Apr Apr WTI +1.45 7,000 WCS Cushing Cushing Oklahoma Apr Apr CMA Nymex trade days -3.75 3,333 WCS Cushing Cushing Oklahoma Apr Apr CMA Nymex trade days -3.75 3,333 WCS Cushing Cushing Oklahoma Apr Apr CMA Nymex trade days -3.65 2,000 WTS Midland Texas Apr Apr WTI Midland -0.85 2,000

Global crude deals $/bl Deal Delivery Diff D i ff Loading Loading Region Grade Volume bl Price Diff basis date period timing price from to

Northwest Europe North Sea 1 Mar 21 May 100,000 65.05 Northwest Europe North Sea 1 Mar 21 May 100,000 65.06 Northwest Europe North Sea 1 Mar 21 May 100,000 65.09 Northwest Europe North Sea 1 Mar 21 Jun 100,000 63.34 Northwest Europe North Sea Dated CFD 1 Mar 21 100,000 May North Sea +0.05 8 Mar 21 12 Mar 21 Northwest Europe North Sea Dated CFD 1 Mar 21 100,000 May North Sea +0.03 8 Mar 21 12 Mar 21 Northwest Europe North Sea Dated CFD 1 Mar 21 200,000 May North Sea - 0.10 15 Mar 21 19 Mar 21 Northwest Europe North Sea Dated CFD 1 Mar 21 500,000 May North Sea - 0.10 15 Mar 21 19 Mar 21 Northwest Europe North Sea Dated CFD 1 Mar 21 100,000 May North Sea - 0.15 15 Mar 21 19 Mar 21 Northwest Europe North Sea Dated CFD 1 Mar 21 100,000 May North Sea - 0.20 22 Mar 21 26 Mar 21 Northwest Europe North Sea Dated CFD 1 Mar 21 200,000 May North Sea - 0.19 22 Mar 21 26 Mar 21 Northwest Europe North Sea Dated CFD 1 Mar 21 300,000 May North Sea - 0.19 22 Mar 21 26 Mar 21 Northwest Europe North Sea Dated CFD 1 Mar 21 100,000 May North Sea - 0.16 22 Mar 21 26 Mar 21 Northwest Europe North Sea Dated CFD 1 Mar 21 100,000 May North Sea - 0.16 22 Mar 21 26 Mar 21 Northwest Europe North Sea Dated CFD 1 Mar 21 100,000 Jun North Sea +0.35 29 Mar 21 1 Apr 21

Daily Netbacks

Northwest Europe (1 Mar) $/bl Complex Simple Yield Freight Netback ± 26 Feb Yield Freight Netback ± 26 Feb

Arab Light 65.93 0.72 65.21 -0.10 65.01 0.72 64.29 -0.66 Arab Heavy 63.31 0.74 62.57 -0.04 61.79 0.74 61.05 -0.66 Azeri 68.79 1.65 67.14 nc 68.18 1.65 66.53 -0.51 Basrah Light (pre-2021) 62.84 0.74 62.10 -0.02 61.84 0.74 61.10 -0.57 Bonny Light 69.50 1.09 68.41 -0.23 68.85 1.09 67.76 -0.64 Brass River 68.91 1.05 67.86 -0.11 68.41 1.05 67.36 -0.45 Brent 67.83 0.71 67.12 -0.07 66.97 0.71 66.26 -0.58 Es Sider 67.34 1.64 65.70 -0.05 66.85 1.64 65.21 -0.47 Forties 66.90 0.70 66.20 -0.06 65.94 0.70 65.24 -0.50 Iranian Light 66.05 0.72 65.33 -0.08 65.06 0.72 64.34 -0.67 Kirkuk 64.86 0.71 64.15 -0.01 64.04 0.71 63.33 -0.51 Kuwait 63.80 0.73 63.07 -0.04 62.68 0.73 61.95 -0.62 Murban 67.0 4 0.69 66.35 -0.08 66.10 0.69 65.41 -0.51 Saharan Blend 67.23 1.56 65.67 +0.10 66.74 1.56 65.18 -0.28 Urals 66.44 0.00 66.44 -0.10 65.35 0.00 65.35 -0.66 Zueitina 67.50 1.63 65.87 -0.03 66.40 1.63 64.77 -0.50

Singapore (1 Mar) $/bl Complex Simple Yield Freight Netback ± 26 Feb Yield Freight Netback ± 26 Feb

Arab Light 68.87 0.84 68.03 +0.11 63.84 0.84 63.00 +0.12 Arab Heavy 67.29 0.87 66.42 +0.12 61.27 0.87 60.40 +0.14 Basrah Light (pre-2021) 67.54 0.86 66.68 +0.15 62.38 0.86 61.52 +0.15 Dubai 69.12 0.85 68.27 +0.07 63.46 0.85 62.61 +0.13 ESPO Blend 69.24 0.53 68.71 +0.03 62.78 0.53 62.25 +0.09 Iranian Heavy 68.21 0.86 67.35 +0.07 61.87 0.86 61.01 +0.14 Minas 68.33 1.35 66.98 -0.10 60.94 1.35 59.59 -0.03 Murban 69.50 0.80 68.70 +0.13 64.35 0.80 63.55 +0.15 Oman 68.29 0.85 67.4 4 +0.11 61.57 0.85 60.72 +0.14

US Gulf coast (1 Mar) $/bl Complex Simple Yield Freight Netback ± 26 Feb Yield Freight Netback ± 26 Feb

Arab Light 71.44 0.78 70.66 -1.12 68.23 0.78 67.45 -1.28 Arab Medium 70.34 0.79 69.55 -0.65 66.56 0.79 65.77 -1.41 Basrah Light (pre-2021) 69.07 0.80 68.27 -0.63 64.94 0.80 64.14 -1.64 Bonny Light 75.28 1.28 74.00 -0.80 68.25 1.28 66.97 -0.88 LLS 73.35 0.00 73.35 -0.69 70.22 0.00 70.22 -0.86 Mars 70.62 0.00 70.62 -1.25 66.70 0.00 66.70 -1.69 Maya 64.53 1.99 62.54 -1.91 60.35 1.99 58.36 -2.83 WTI 73.70 0.00 73.70 -0.53 71.02 0.00 71.02 -0.60

US west coast (1 Mar) $/bl Complex Simple Yield Freight Netback ± 26 Feb Yield Freight Netback ± 26 Feb

ANS 77.39 0.00 77.39 -0.83 68.87 0.00 68.87 -2.58 Oriente 75.82 2.67 73.15 -0.89 70.41 2.67 67.74 -0.81 Oriente implied fob* 60.07 -0.70 *This price takes the Oriente complex netback and subtracts a USWC refining margin for a grade of similar quality.

Monthly Netbacks

Northwest Europe (February) $/bl Complex Simple Yield Netback ± Jan Yield Netback ± Jan

Arab Light 62.23 61.51 +6.96 62.03 61.31 +6.83 Arab Heavy 59.53 58.78 +6.57 58.91 58.16 +6.19 Azeri 65.00 63.66 +6.95 64.88 63.54 +6.97 Basrah Light (pre-2021) 59.20 58.45 +6.34 58.93 58.18 +6.18 Bonny Light 65.50 64.40 +7.42 65.32 64.22 +7.43 Brass River 64.66 63.60 +7.39 64.51 63.45 +7.43 Brent 63.83 63.19 +7.20 63.50 62.86 +7.25 Es Sider 63.72 62.39 +6.81 63.65 62.33 +6.81 Forties 62.97 62.33 +7.02 62.53 61.90 +6.84 Iranian Light 62.28 61.56 +6.95 62.05 61.32 +6.79 Kirkuk 61.13 60.41 +6.68 60.98 60.26 +6.56 Kuwait 60.08 59.35 +6.60 59.77 59.03 +6.39 Murban 63.26 62.57 +7.12 62.99 62.30 +6.94 Saharan Blend 63.57 62.31 +6.60 63.51 62.26 +6.61 Urals 62.63 62.63 +6.99 62.32 62.32 +6.77 Zueitina 63.84 62.52 +6.81 63.31 61.99 +6.60

Singapore (February) $/bl Complex Simple Yield Netback ± Jan Yield Netback ± Jan

Arab Light 64.97 64.12 +7.31 60.26 59.42 +6.83 Arab Heavy 63.50 62.63 +6.91 57.86 56.98 +6.27 Basrah Light (pre-2021) 63.64 62.77 +6.93 58.83 57.96 +6.39 Dubai 65.24 64.39 +7.55 59.91 59.06 +7.0 0 ESPO 65.43 64.94 +7.4 0 59.31 58.82 +6.66 Iranian Heavy 64.39 63.53 +7.25 58.43 57.57 +6.51 Minas 64.61 63.53 +7.37 57.71 56.63 +7.48 Murban 65.53 64.73 +7.36 60.68 59.88 +6.80 Oman 64.47 63.61 +7.22 58.13 57.27 +6.62

US Gulf (February) $/bl Complex Simple Yield Netback ± Jan Yield Netback ± Jan

Arab Light 68.39 67.60 +8.24 65.08 64.29 +7.26 Arab Medium 67.21 66.42 +8.18 63.30 62.50 +6.88 Basrah Light (pre-2021) 65.96 65.16 +8.03 61.58 60.77 +6.45 Bonny Light 71.74 70.45 +8.38 65.06 63.77 +6.64 LLS 69.97 69.97 +8.47 66.83 66.83 +7.63 Mars 67.56 67.56 +8.10 63.59 63.59 +6.93 Maya 61.72 60.27 +6.78 57.24 55.79 +5.18 WTI 69.99 69.99 +8.48 67.29 67.29 +7.76

US west coast (February) $/bl Complex Simple Yield Netback ± Jan Yield Netback ± Jan

ANS 73.18 73.18 +8.00 66.77 66.77 +6.49 Oriente 71.88 68.81 +8.14 66.15 63.08 +6.60 Oriente implied fob* 58.98 +6.09 *This price takes the Oriente complex netback and subtracts a USWC refining margin for a grade of similar quality.

Infrastructure news

Plains lifts force majeure on Texas pipelines to 6mn b/d — the lowest since Hurricane Harvey flooded the Plains All American Pipeline has lifted a force majeure Texas coast in September 2017. on 15 Texas crude pipelines and gathering systems which By Eunice Bridges had been in place since mid-February following severe winter weather and power outages. Trafigura to supply crude to Lindsey refinery The company has resumed normal operations on the pipe- UK-based Prax Group said today that it has agreed a crude line systems, Plains said in a 26 February notice to shippers. and feedstocks supply deal with trading firm Trafigura for The force majeure was lifted for: the Cactus pipeline, the 110,000 b/d Lindsey refinery in northeast England. the Alpha Crude Connector, Sunrise 2 pipeline, the Basin Under the agreement, all the crude and refinery feed- system, the Iatan gathering system, the McCamey pipeline, stocks for Lindsey will come from Trafigura. No other details the Mesa pipeline, the Midland South pipeline, the Spraberry were forthcoming. pipeline system, the Pinon pipeline, the Scurry pipeline, the Prax took control of Lindsey from Total today, upon Mesa pipeline, the Permian basin system, the west Texas completion of a deal initially agreed in late July last year. It gathering system and the Wolverine gathering system. had been to close by the end of 2020. Plains issued the force majeure on 15 February “due to The acquisition is part of a "long-term strategy to be fully the ongoing impacts from the below-freezing temperatures, integrated across the oil value chain" in the UK, Prax said. ice and snow from the winter storm, which has caused It does downstream marketing and distribution through its power outages, road closures, and other delays which are Harvest Energy brand. impacting operations of the pipeline systems.” The company By Saleem Rizvi warned shippers that the force majeure "may cause shippers to see reductions to nominations for February.” The cold snap that crippled Texas' power grid cut deeply Announcement into US crude production and refining, but the impact may be relatively short-lived. Argus Sour Crude Index (“ASCI”) US oil output fell by 1.1mn b/d, or 10pc, in the week Proportional assessment ended 19 February, according to Energy Information Adminis- Following the end of the first trading quarter of 2021 tration estimates. Refinery inputs fell more steeply as wide- and in accordance with the ASCI price methodology, spread power cuts and natural gas curtailments forced many Argus has revised the proportionality assigned to Mars, units to shut. US Gulf coast refinery processing fell by 27pc Poseidon and SGC to be used in the event that the combined volume minimum of 6,000 b/d is not met in any given trade day. The latest proportional assessment values are based on the volume of trade over the last six Announcement trade months and will be applicable for the next three trade months starting 26 February 2021 and ending 25 Argus successfully completes annual Iosco assurance review May 2021 Each grade has been assigned the following percentage values: Argus has completed the ninth external assurance review of its price benchmarks covering crude oil, Mars: 67pc products, LPG, petrochemicals, biofuels, thermal coal, Poseidon: 27pc coking coal, iron ore, steel, natural gas and biomass SGC: 6pc benchmarks. The review was carried out by profes- sional services firm PwC. Annual independent, external A table containing a history of the proportional assess- reviews of oil benchmarks are required by international ment values can be found in the ASCI price methodol- regulatory group Iosco’s Principles for Oil Price Report- ogy, which is available at http://www.argusmedia.com/ ing Agencies, and Iosco encourages extension of the re- asci. If you have any questions or would like to comment views to non-oil benchmarks. For more information and on these changes, please contact Gustavo Vasquez at to download the review visit our website https://www. [email protected] and (713) 968-0014, argusmedia.com/en/about-us/governance-compliance or Amanda Smith at [email protected] and (713) 968-0013.

iNDUSTRY news

US keeps offer of Iran talks sel in the Gulf of Oman last week. The US still sees a diplomatic path forward to reviving the The timing of the Syria attack and accusations leveled by Iran nuclear deal, despite Tehran's initial rejection of EU- Washington against Tehran may be behind Iran's initial rejec- sponsored talks. tion of talks. "“In view of the recent stances and measures President Joe Biden's administration last month offered taken by the US and the three European countries, the Islamic to join talks with Tehran hosted by the EU and the Euro- Republic of Iran believes this is not a good time for holding pean members of the Joint Comprehensive Plan of Action an unofficial meeting on the accord as proposed by the EU (JCPOA) nuclear deal — France, Germany and the UK. foreign policy chief, Josep Borrell," Iran's foreign ministry said. Tehran rejected the proposal yesterday, demanding relief By Haik Gugarats of US sanctions as a precondition for talks. "We are disappointed in Iran's response," the White House Somo crude exports up in February said today, but added that the US is ready to "reengage in Iraqi crude exports marketed by federal company Somo were meaningful diplomacy to achieve a mutual return to compli- up by 3pc on the month to 2.96mn b/d in February, driven by ance with JCPOA commitments." increases in Basrah shipments, Iraq’s oil ministry said. For now, it appears that Washington and Tehran continue Combined Basrah crude loadings rose by 2pc on the to publicly frame their future negotiations, keeping a path- month to 2.83mn b/d on February. The oil ministry signalled way to a diplomatic solution while maintaining hardline posi- just last week that monthly grade exports for most of Febru- tions. The timing and prospect of the US return to the Iran ary were at a lower 2.7mn b/d. nuclear deal is relevant for oil markets, as it would involve Somo-marketed Kirkuk blend volumes dropped by 36pc the lifting of US sanctions that since 2018 cut off more than on the month to 63,000 b/d in February. The company’s 2mn b/d of Iranian crude exports. figures do not capture the majority of Kirkuk blend supplies, "The path forward is quite clear: The US must end its which are sold by the Kurdistan Regional Government (KRG). unlawful and unilateral sanctions and return to its JCPOA Somo’s revenues rose by 5pc to around $5bn in Febru- commitments," Iran's foreign ministry said yesterday. Imple- ary, while the company achieved an average crude price of mentation of commitments by all parties to the JCPOA is not $60.33/bl on the month, up by 13pc from January. a matter of negotiation and give and take, it said. By Ruxandra Iordache In turn, the White House said it will hold consultations with the remaining JCPOA members. Biden's administra- Abu Dhabi appoints Adnoc board tion says it will not lift sanctions or provide an economic Abu Dhabi’s crown prince Mohammad bin Zayed al-Nahyan, lifeline to Tehran to facilitate talks. issued a decree today forming a new board of directors and "What we are seeing is a little bit of a test of wills — I executive committee for state-owned energy giant Adnoc. believe the Iranians truly do want to come back to the The use of an executive committee is usually to expedite JCPOA, but they are really trying to test the Biden admin- decision making and maintain oversight over the day to day istration. They are trying to see how desperate is Biden management on a regular basis. In Adnoc’s case, the forma- to rejoin the JCPOA," Harvard University's geopolitics of tion of the board and committee could be an indication of energy project direct Meghan O'Sullivan told the CERAWeek plans to increase activity, one UAE-based consultant said. by IHS Markit conference today. The board of directors will be chaired by Sheikh Mohammad, Biden's administration early on took steps to defuse but also includes his son, Sheikh Khalid bin Mohammad, as well confrontation with Iran in hopes it would help facilitate as his full brothers, Hazza bin Zayed and Mansour bin Zayed. outreach to Tehran. But tensions are rising in the Middle Sultan al-Jaber, Adnoc’s current CEO, is also represented East again. The Pentagon on 25 February carried out mis- on the committee, alongside Khaldoon al-Mubarak, the CEO sile strikes in eastern Syria against what it said were camps of sovereign wealth fund Mubadala. Al-Jaber, who is also occupied by Iran-backed militias that the US concluded were the UAE’s minister of industry and advanced technology, behind a 15 February attack in northern Iraq that injured US was named the company’s managing director in a separate military personnel. And Israeli prime minister Benjamin Ne- decree. He retains his position as chief executive officer. tanyahu, who fiercely opposes the US' return to the JCPOA, UAE minister of energy and infrastructure Suhail al-Maz- today blamed Iran for an explosion on an Israeli-owned ves- rouei is also on the board, as well as secretary general of Abu

iNDUSTRY news

Dhabi Executive Council Ahmed al-Mazrouei, Adnoc chief fi- this month, which would give Forties an average gravity of nancial officer Jassem al-Zaabi, minister of state and chairman around 40.3°API and sulphur content near 0.62pc. Forties of Abu Dhabi Global Market Ahmed al-Sayegh and chairman of quality will be slightly sweeter and lighter next month as Abu Dhabi Department of Energy Awaidha al-Marar. Ineos forecast a 23.5pc Buzzard contribution. The new Adnoc executive committee will be chaired by Sheikh Khaled, and also includes al-Jaber, Mubarak, UK crude production down in January Zaabi, Mazreoui and al-Sayegh. The UK's crude production declined in January, when domes- Adnoc previously reported to the Supreme Petroleum tic demand was constrained by a third national lockdown. Council (SPC), which was merged into a new entity, the Production averaged 860,000 b/d, down by 9pc from Supreme Council for Financial and Economic Affairs(SCFE) December's revised 945,000 b/d and around 18pc below in late-December to oversee the emirate's overall economic the 1mn b/d achieved in January 2020, according to lat- affairs, including the management of oil and gas resources. est government figures. The SCFE is chaired by UAE president Khalifa bin Zayed al- The figure for January suggests that total UK liquids output Nahyan, while Sheikh Mohammed is the vice chairman. The averaged 932,000 b/d in January, down by 8pc from December, ill health of the president, however, has left Mohammed bin with the latest national lockdown playing a part in the decline. Zayed as the de facto ruler of Abu Dhabi. Output fell at key assets. Crude production at Buz- The SPC would oversee the work of state-owned Adnoc, in- zard — the UK's largest field, which feeds into the For- cluding setting its budgets and approving contracts with interna- ties benchmark crude stream — fell by around 4pc on the tional oil companies such as BP, Total and China's CNPC. Adnoc’s month to 315,000 b/d in January, according to Forties latest capital spending plan for the next five years, stands at Pipeline System (FPS) operator Ineos. $122bn, as it works to boost long-term production capacity to By Riyan Zerrouki 5mn b/d by 2030 from around 4mn b/d currently. Abu Dhabi also hopes to develop new technically challenging gas resources that North Sea quality premiums drop in April would enable the UAE to transition from a net gas importer to an The Argus Quality Premiums (QP) for North Sea benchmark crude exporter and pursue gas-to-chemicals growth opportunities. grades loading in April will drop from those for loading in March. By Adal Mirza The April QPs for Oseberg and Ekofisk will drop by 8¢/ bl and 5¢/bl, respectively, to 24¢/bl and 18¢/bl. Troll's QP Buzzard share of Forties crude declines will fall to 41¢/bl from 48¢/bl. The North Sea's Forties crude stream was slightly lighter and QPs are calculated at 60pc of the difference between sweeter last week, as the Buzzard field share of the grade fell. each grade and the most competitive Brent, Forties, Buzzard accounted for 21pc of unstabilised Forties produc- Oseberg, Ekofisk or Troll grade in the second month prior tion in the week to 28 February, down from 26pc the week be- to the month of loading. fore, according to Forties Pipeline System (FPS) operator Ineos. QPs compensate sellers for settling North Sea forward A 21pc Buzzard contribution yields a Forties blend with a contracts using Ekofisk, Oseberg or Troll cargoes rather than gravity of around 40.9°API and sulphur content of about 0.56pc. Forties, which is usually of a lower value. The lower the QP, Ineos expects Buzzard's contribution to average 25.2pc the less likely that a cargo of one of these three grades will be used to settle a forward contract. The differential — with QP deducted — is also used to set North Sea Dated as the Change to CPC Blend fob terminal netback lowest priced of the five benchmark grades. methodology The Quality Adjustments (QA) that Argus uses in the Following consultation, Argus will change its CPC Blend calculation of its New North Sea Dated price will also move fob Terminal netback methodology from 8 March. Argus lower. QAs are calculated in the same way as QPs but use an will assess freight costs specifically for voyages originat- expanded basket of crude grades. ing at the terminal, rather than using a Novorossiysk rate The Ekofisk QA will fall by 6¢/bl on the month to 42¢/bl minus a CPC Terminal discount. Insurance and demurrage in April, and the Troll and Oseberg QAs will both fall by 8¢/ costs will continue to be added. Argus will also apply bl to 65¢/bl and 48¢/bl, respectively. freight costs for 80,000t vessels, rather than for 135,000t The QAs for Nigerian grades Qua Iboe and Bonny Light will vessels. drop by 17¢/bl and 18¢/bl, respectively, to 43¢/bl and 46¢/bl.

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New North Sea Dated is based on fob assessments of The country's production has been declining for several the five existing Dated grades, along with the freight- years and even though a new asset — the Q16-Maasmond or adjusted values of cif-Rotterdam priced US WTI, as well Charlie-North — coming on stream in September last year, as Bonny Light and Qua Iboe. Argus deducts a QA from output will probably continue to decline. Ekofisk, Oseberg, Troll, Bonny Light and Qua Iboe when The Netherlands' monthly liquids production fell by 6pc establishing which grade is the cheapest. to 19,300 b/d in December, of which around 87pc or around By Riyan Zerrouki 16,800 b/d was crude. This was 6pc below November’s average, but 4pc above the same month the previous year. Dutch liquids production fell in 2020 Field-by-field data show that output fell at several Dutch as- Dutch liquids output hit a new low in 2020, at an average of sets, but that this was partly offset by increased output at the 17,600 b/d. Crude and condensate production was down by country's largest fields Schoonebeek Olie and Amstel. Schoone- 5pc from 2019 and 32pc below the average of the past five beek Olie produced 7,400 b/d of crude in December, compared years, according to Nlog, which provides production data on with 7,200 b/d the month before. Amstel production was higher behalf of the economy ministry. by 9pc on the month at 2,300 b/d in December. By Riyan Zerrouki Change to Urals Mediterranean assessments Following consultation, on 1 June 2020 Argus will change Kozmino ESPO Blend exports may rise in April its Urals Mediterranean 80,000t and 140,000t crude as- Seaborne exports of ESPO Blend crude from Russia’s Kozmino sessments to expand the range of allowable cargo sizes port could rise to an 11-month high of 2.82mn t (696,000b/d) and to include supplies of Baltic Urals in the reporting of in April, according to a preliminary loading programme. delivered Mediterranean prices. This would be the highest export volume since May Under this proposal: 2020 when 766,000 b/d of ESPO Blend was exported from The Urals Med 80,000t assessment will be renamed Kozmino. Scheduled March exports from Kozmino are on Urals Med Aframax, and will include cargoes in an course to reach 668,000 b/d, after a cargo was added to 80,000-100,000t range. The location and timing of the the programme late last month. assessment remain unchanged — cargoes will be as- The April Kozmino programme comprises 24 cargoes sessed on a cif Augusta, Italy, basis for loading 10-25 days of 100,000t each and three cargoes of 140,000t. Russian ahead. Pre-loaded cargoes will continue to be considered producers Surgutneftgaz and Rosneft will each load eight for inclusion in the assessment, if they are accepted by cargoes from Kozmino in April, Paramount Energy will load buyers as meeting their requested loading dates. For the seven while state-controlled Gazpromneft and private-sector avoidance of doubt, the proposed change will effectively Lukoil will each load two. Lukoil is due to load two 140,000t allow deliveries of Baltic Sea Urals to contribute towards cargoes while Gapromneft is expected to load the remaining the Urals Mediterranean Aframax assessment. one. If there are no changes in the April loading programme, it would be the first time since October 2019 that three The Urals Med 140,000t assessment will be renamed 140,000t cargoes load from Kozmino in a month. Urals Med Suezmax. The basis, timing and cargo size of The rise in Kozmino exports in April could be due to the assessment will not change. lower domestic demand ahead of spring refinery maintenance season in Russia. The Siberian Light assessment will include cargoes in The majority of April-loading ESPO Blend cargoes from an 80,000-85,000t range. The basis and timing of the as- Kozmino were sold last month. April-loading ESPO Blend sessment will not change. traded at premiums of $1.35-2.23/bl to front-month Dubai assessments on a fob Kozmino basis, up from premiums of The Urals fob Novorossiysk 80,000t netback will be 55¢-$1.58/bl to Dubai for March-loading cargoes. April-load- renamed Urals fob Novorossiysk Aframax, and will be the ing cargoes likely achieved firmer premiums due to a steep netback value of 80,000-100,000t cargoes. backwardation in benchmark Dubai. The wide premium of Brent to Dubai also made Dubai-linked grades such as ESPO The Urals fob Novorossiysk 140,000t netback will be Blend more attractive for Asia-Pacific refiners. renamed Urals fob Novorossiysk Suezmax, and will be the By Yvette Choo netback value of 140,000t cargoes.

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Congolese crude exports to fall in April Saeed Khatibzadeh said. “Netanyahu is suffering from a panic Export loadings of crude from Congo (Brazzaville) will fall disorder about Iran… When it comes to security, Israel knows to 215,000 b/d in April from the 237,000 b/d planned in that Iran’s response will be accurate and technical.” March, according to programmes. The Helios Ray was located around 44 nautical miles Exports of flagship grade Djeno will slide to 184,000 northwest of the Omani capital of Muscat when the incident b/d on six shipments in April. This is one cargo fewer than occurred. It anchored in Dubai on 27 February, according to planned for March's 208,000 b/d. vessel tracker MarineTraffic. One cargo of N'Kossa is scheduled for a total of 31,000 Although the vessel in question is not a tanker, the Gulf of b/d, broadly unchanged on the month. The cargo is sched- Oman is the main artery for oil exports from the Mideast Gulf. uled to load on 22-23 April. An explosion on an oil product tanker in the Saudi Ara- The combined Djeno and N’Kossa tally of 215,000 b/d is bian port of Jeddah late last year, as well as damage to four the lowest planned export amount since 2017. tankers close to UAE territorial waters and a drone strike on Congo's Opec+ production cap is 269,000 b/d for March. two Saudi Arabian pumping stations in May 2019, have con- The group will meet this week to decide on April quotas. tributed to heightened security concerns in the region. By Andy Devine By Nader Itayim

Chad's Doba exports flat in April Australian exploration spend at 16-year low Loadings of Chad’s flagship grade Doba have been sched- Oil and gas exploration spending in Australia dropped uled flat on the month at 123,000 b/d in April, according to a 16-year low in calendar 2020 on a plunge in offshore to market participants. exploration activity last year when spending fell to its low- Four cargoes of Chad’s heavy sweet Doba are scheduled est in 29 years. But onshore spending rose to a five-year in April. Chinese company CNPC's local subsidiary CNPCIC high, according to the latest official quarterly data. Total oil will market three cargoes to load on 4-5, 18-19 and 25-26 and gas exploration spending for both onshore and offshore April, traders told Argus. Taiwan's state-owned CPC is set to fell by 28pc in calendar 2020 compared with 2019 to the market a cargo loading on 11-12 April. lowest annual exploration spend since A$917.6mn in 2004 By Andy Devine when offshore spending dominated, according to mineral and petroleum exploration data for October-December from the Netanyahu blames Iran for vessel blast Australian Bureau of Statistics (ABS). Israeli prime minister Benjamin Netanyahu today has blamed Offshore upstream spending dropped by 52pc on the year Iran for an explosion on an Israeli-owned vessel in the Gulf in 2020 and was around 89pc below the A$3.32bn spend in of Oman last week, further stoking regional tensions. 2014. It was the lowest offshore spend since A$341.7mn in The Helios Ray, a car carrier vessel owned by an 1991, the ABS data showed. Israeli investment firm with the same name, was af- By contrast, onshore upstream spending rose to A$604.9mn fected by an explosion late on 25 February, according to in 2020 from A$585.8mn in 2019 and was the highest onshore security company Dryad Global. spend since A$904mn in 2015, according to the latest data. “This is indeed an action of Iran. It is clear,” Netanyahu told Offshore spending was more impacted than onshore state-owned Kan Radio early this morning. “It is Israel’s biggest upstream exploration expenditure by the effects of the enemy and we are beating it in the whole region,” he said. Covid-19 pandemic because of a plunge in oil prices in early Asked if Israel would respond, Netanyahu only reiterated 2020 and restrictions on worker travel to offshore plat- that Iran “will not have nuclear weapons — with or without forms where social distancing was more challenging than an agreement.” He was referring to the 2015 nuclear deal, for onshore exploration activities. which the US has suggested it would be open to returning to Australian upstream firms such as Woodside Petroleum and after former US president Donald Trump exited the deal in Santos deferred spending for exploration and project devel- 2018. Tensions in the region are already high due the esca- opment earlier last year in response to weaker oil and gas lating nuclear dispute between Tehran and Washington DC. prices at the time, although energy prices started to recover Later this morning, Tehran rebuked the Israeli premier’s in the October-December quarter, leading to a rise in offshore comments and dismissed them outright. “The Persian Gulf and exploration spending in the last three months of 2020, it said. Oman Sea is our immediate area of security and we will not The decline in offshore spending was reflected in lower allow them to intimidate us,” Iran’s foreign ministry spokesman expenditure in Australia’s largest offshore oil and gas pro-

iNDUSTRY news ducing state of Western Australia, where spending dropped “Until we see the outlook for Myanmar and its politi- to a 23-year low of A$421mn in 2020. By contrast, the rise in cal stability has improved, Woodside will keep all business onshore expenditure underpinned an increase in exploration decisions under review,” the company said. Woodside does spending in Queensland, Australia’s largest gas-producing not have any direct commercial arrangements with any of state, where most of the gas produced is used as feedstock Myanmar’s armed forces organisations, it said. for the three LNG plants located at the port of Gladstone. The statement, on 27 February, came a day before a The decline in exploration spending is heavily influenced major escalation in violence following the military takeover by oil price expectations. Ice Brent crude prices averaged and the arrest of the country’s elected leaders at the start around $41.96/bl last year, down from $64.30/bl in 2019 and of February. At least 18 protestors were killed yesterday, the the lowest average since $38.26/bl in 2004. UN said, by far the worst death toll so far. By Kevin Morrison The US government said it was alarmed by the latest violence, which it described as an escalation of the secu- Nigeria's Seplat to maintain output in 2021 rity forces’ crackdown on pro-democracy protestors. “We Nigerian upstream firm Seplat Petroleum said it aims to pro- are preparing additional actions to impose further costs on duce 48,000-55,000 b/d of oil equivalent (boe/d) this year, those responsible for this latest outbreak of violence and the similar to its 2020 output that rose by 10pc on the year. recent coup,” national security adviser Jake Sullivan said. Seplat reported working-interest production of 51,183 boe/d Washington imposed sanctions on individuals involved in in 2020, within its guidance range and up by 10.1pc from 46,498 the coup last month. boe/d in 2019. The rise, which came in a year that Opec+ Woodside’s main interest in Myanmar, where it has been cuts curtailed Nigerian output and in which demand slumped operating since 2013, is in several offshore exploration because of the Covid-19 pandemic, was mainly the result of blocks. In January it started its fourth drilling campaign, contributions from recently-acquired Eland assets. including on its exploration block A-7 and in AD-1 and AD-8. Considering Opec+ quotas, the firm's 2021 production By Kevin Morrison and Kevin Foster guidance is 48,000-55,000 boe/d, similar to its 2020 guidance of 47,000-57,000 boe/d, although it said that this is NYSE to delist China’s CNOOC "subject to market conditions." The New York Stock Exchange (NYSE) is moving ahead Seplat's 2021 capex is for around $150mn, focusing on with plans to delist Chinese state-controlled energy firm gas projects and an exploration well. The firm increased its CNOOC, in line with an executive order issued by previ- capex by 20pc last year to $120mn. ous US president Donald Trump. Seplat's fully-funded joint ANOH project with the Nigerian CNOOC said today it had received notice from the NYSE Gas Company is underway, with major gas processing units that it would be delisted on 9 March. “The company regrets scheduled for delivery in the third quarter of this year and first the NYSE’s aforesaid decision and actions,” it said, advising gas expected in the first half of 2022. Six production wells will investors to be cautious when dealing in its securities. be drilled, four of which will be completed this year. Seplat The NYSE actions are in line with a late-January state- chief executive Roger Brown said that the project will facilitate ment by the US Treasury's sanctions enforcement arm the "Nigeria’s transition away from spending scarce foreign cur- Office of Foreign Assets Control, confirming that the prohibi- rency on imported, expensive, high-emission diesel-generated tion on trading in CNOOC shares will take effect on 9 March. electricity" to cleaner and cheaper generation fuels. Divesting of securities will still be allowed until 11 Novem- Seplat reported revenue of $530.5mn in 2020, down by ber, so long as the buyer is not a US person. almost a quarter from $697.8mn in 2019, primarily a result CNOOC is among 35 Chinese companies targeted by ex- of lower oil prices. It made a loss of $85.3mn, compared ecutive orders issued by former president Trump in his final with a profit of $277mn in 2019. months in office under a previously unused law that cuts off By Saleem Rizvi access to the US financial system for entities Washington contends are tied to the Chinese military. President Joe Woodside pauses Burmese activity Biden's administration plans to review those actions. Australian independent Woodside Petroleum plans to reduce CNOOC said today that investors had the option to its presence in Myanmar (Burma) and demobilise its offshore transfer their American depositary shares (ADS) to Hong exploration drilling team in the coming weeks amid escalat- Kong shares. Each ADS can be cancelled in exchange for 100 ing civil unrest in the country. ordinary shares with JP Morgan Chase Bank, the depositary

iNDUSTRY news for CNOOC’s ADS. Shareholders can continue to directly own Petronas Chemicals (PCG) recording petrochemical production of the shares while the bank remains the agent, CNOOC said. above 10mn t against 10.4mn t in 2019 and sales of 8.2mn t com- CNOOC’s ADS listing in NYSE accounts for only a small pared with “above 8mn t” in 2019, all largely stable on the year. proportion of its shares, equivalent to just 0.5pc of CNOOC Petronas’ 300,000 b/d Pengerang refinery and petrochemi- shares listed on the Hong Kong Exchange, the company said. cal joint venture with Saudi Arabia's state-controlled Saudi The average daily trading volume of ADS accounted for about Aramco in Johor state is now expected to start up in the sec- 14.5pc of its total shares traded in Hong Kong, New York and ond half of 2021, with the delay a result of Malaysia’s renewed Toronto in 2020. CNOOC had issued a total of 44.65bn com- movement control order that took effect on 13 January. mon shares in Hong Kong as of February. PCG is also exploring opportunities in the specialty CNOOC shares fell by as much as 4.5pc in intraday trading chemicals market with the development of a 200,000 t/yr after the announcement, but ended down by just 1.1pc today. nitrile butadiene latex plant at the Pengerang complex and Three state-owned telecom operators that are also on an ethoxylates unit in Kerteh, Terengganu. “Both plants are the US list — China Mobile, China Unicom and China Telecom expected to cater to growing demand in southeast Asia and — were delisted from NYSE in January. Unlike those compa- the Asia-Pacific region,” the firm said. nies, CNOOC did not say that it would request for a review Petronas started 2020 with planned capital expenditure of the NYSE’s decision. (capex) of 50bn ringgit, which was subsequently cut to 33.4bn ringgit because of the Covid-19 pandemic. Fitch Rat- Petronas posts $5bn loss ings estimates the firm’s capex at 45bn-50bn ringgit/yr after Impairment losses and reduced revenues pushed Malay- 2020, driven mainly by upstream investments. sian state-owned oil firm Petronas to a loss of 21bn ringgit The overall 2020 result has left Petronas cautiously optimis- ($5.2bn) for 2020 compared with a 40.5bn ringgit profit in tic, with it looking to “future-proof” its portfolio by venturing 2019, largely because of lower oil prices. into new energy spaces such as renewables in line with its com- Last year’s sharp fall in prices forced Petronas to book a mitment to achieve net-zero carbon emissions by 2050. 31.5bn ringgit impairment charge on assets. “The downward “Although gas remains a crucial and cleaner source revision in [the] commodity price outlook is further com- of fuel, diversification into renewable energy is impera- pounded given the accelerated pace of energy transition. tive,” Petronas said. This has resulted in most oil and gas companies, including The firm is also intensifying efforts to reduce scope one and Petronas, taking significant impairment loss provisions on two greenhouse gas emissions, Tengku Muhammad Taufik said in their assets during the year,” it said. the company’s 2021-23 activity outlook released in December. Plummeting oil prices and demand disruptions resulting But Petronas “remains committed to maximise its oil and in lower sales volumes from processed gas, oil products and gas production as a cash generator while producing gas to meet LNG also dragged down Petronas’ 2020 revenues by nearly customers’ demand within its allocated capital investment”, it 26pc to 178.7bn ringgit from 240.3bn ringgit in 2019. Exact said in the report, indicating that oil and gas will remain key to figures of these sales volumes were undisclosed. Petronas’ financial growth at least for the next couple of years. Ice Brent crude prices averaged around $41.96/bl last By Reena Nathan year, down from $64.30/bl in 2019 and the lowest average since $38.26/bl in 2004. Storms cut deep into US output Petronas' upstream production was also weaker. “Up- The cold snap that crippled Texas’ power grid cut deeply stream recorded a total daily production average 2.209mn into US crude production and refining, but the impact b/d of oil equivalent (boe/d), lower by 8.2pc than the may be relatively short-lived. 2.406mn boe/d recorded in 2019,” it said. The figures cover US oil output fell by 1.1mn b/d, or 10pc, in the week to total production from fields in which Petronas has an inter- 19 February, preliminary data from the Energy Information est. It did not provide a figure for equity output. Administration (EIA) show. Refinery inputs fell more steeply Petronas president and group chief executive Tengku as widespread power cuts and natural gas curtailments forced Muhammad Taufik Tengku Aziz anticipates only a modest many units to shut. Throughputs fell by nearly 18pc to 12.6mn recovery in prices and demand as Covid-19-triggered uncer- b/d, the lowest in over a decade. US Gulf coast refinery pro- tainty continues to affect the oil and gas industry. cessing fell by 27pc to 6mn b/d — the lowest since Hurricane Downstream operations were less affected with subsidiary Harvey flooded the Texas coast in September 2017.

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Crude producers reported brief but intense cuts in complete for some operators. Others may choose to bring output, particularly in Texas, as utilities cut power to oil forward spring maintenance that would have shut facilities field sites to keep residential customers supplied, equipment soon anyway. US independent Delek has done this at its froze and wells proved difficult to access because of icy 83,000 b/d El Dorado refinery in Arkansas. roads. The impact on output in the first quarter ranges from cuts of 5-12pc among producers that have reported so far. US pipeline expansions move forward The storms will cut US production by 700,000 b/d in Febru- A handful of US crude pipeline expansions that survived ary, “with relatively quick recovery based on past disruptions”, a Covid-19 cost-cutting blitz by midstream companies will Goldman Sachs says. Storm-related shut-ins will total 660,000 come into service in the next two years. b/d in the Permian basin of west Texas in February and another The pipelines are at the tail end of a massive, multi-year 160,000 b/d in March, consultancy Rystad Energy says. midstream buildout pushed by record high production and ConocoPhillips says most of its production in the Bakken growing exports that added more than 2.5mn b/d of take- and Eagle Ford shales resumed normal operations this week, away capacity from the Permian basin. The ongoing addi- but that Permian production continues to lag. “We continue to tions were all planned before the Covid-19 pandemic and assess the situation and are bringing production back on line hope to reap the benefits after the crisis abates and global as infrastructure is restored, and when it is safe to do so,” the demand returns to normal levels. firm says. ExxonMobil says its Permian operations are also “run- Developers are also counting on a rebound in US produc- ning at reduced capacity”, without providing further details. tion, which is down by about 2mn bd from pre-pandemic Independent Apache cut its US production estimate for the first levels, with a further, temporary drop last week because of quarter by 12pc to 204,000 b/d of oil equivalent (boe/d). severe winter weather in Texas and other states. Occidental Petroleum, the largest single Permian pro- The largest pipeline project, known as “Wink-to- ducer, expects first-quarter Permian output to be down by Webster,” is the last in a string of Permian new builds and about 25,000 boe/d, putting it at 450,000-460,000 boe/d — expansions that vastly increased the movement of crude to well above the 382,000 boe/d that it produced in the fourth the Gulf coast, providing supply for a rise in exports, mostly quarter. Pioneer Natural Resources, which will nearly match at Corpus Christi and Houston. Occidental in Permian output with its acquisition of Parsley The ExxonMobil-led 1.5mn b/d joint venture Wink-to-Web- Energy last year, expects its full-year production to fall by ster has started some initial service with “the real commit- 14,000 boe/d to 528,000-554,000 boe/d. Diamondback En- ments” expected to start in the latter part of this year, said ergy, another Permian-focused producer, says the storm will Plains All American Pipeline, one of the partners in the project. reduce its first-quarter oil output by the equivalent of 4-5 The 650-mile (1,046km) Wink-to-Webster system moves crude days of production, or close to 880,000 bl. Independent Ci- from Wink and Midland in the Permian to multiple locations near marex expects a 5-7pc hit from the storm in the Permian and Houston, including Webster and Baytown, with connectivity to midcontinent, bringing output to 205,000-225,000 boe/d. Texas City and Beaumont. ExxonMobil has a 560,000 b/d refinery Firms operating more than 5.4mn b/d of refining capacity in in Baytown and a 362,000 b/d refinery in Beaumont. Texas reported reductions or shutdowns from late on 14 Feb- The pipeline system also delivers to the Enterprise ruary. Natural gas curtailments affected some power supplies crude terminal in Houston where it could move to the in electrical grids covering the midcontinent and Gulf coast company's export docks. Enterprise operates 450,000 b/d and drove up prices for industrial users in those regions. of the Wink-to-Webster pipeline capacity as part of an Refiners representing at least 3.4mn b/d of capacity have undivided joint interest in the project. made public plans to restore pre-storm processing rates in Another large pipeline project, Enbridge’s Line 3 replace- early March. This includes Saudi Aramco-owned Motiva’s ment, is on track to start service in the fourth quarter. With 603,000 b/d Port Arthur refinery, the single largest US trenching and welding underway, it is on course to increase facility. Close to 750,000 b/d of refining capacity in Corpus Canadian imports into the US midcontinent. The right of way Christi — at the mouth of major pipelines moving Permian for the pipeline in Minnesota is "mostly clear" and the com- production to waterborne markets — is already restarting. pany is welding pipes on seven spreads, Enbridge said. Some Houston-area facilities have remained shut as Enbridge raised the official price tag for the overall Line 3 damage assessments for the abrupt shutdowns and below- replacement by 13pc to $7.3bn (C$9.3bn) because of regula- freezing conditions continue. Repairs could take weeks to tory delays in Minnesota, extra costs for building in winter,

iNDUSTRY news expenses related to building in a Covid-19 environment, and pected to start in the second quarter. enhancements to environmental protections and construction. The company has received all the federal, state and local The overall project will replace and expand capacity environmental permits it needs for the expansion which will on Line 3 from Alberta in western Canada to Wisconsin. double capacity from Cushing, Oklahoma, to Memphis, Ten- Line 3 has been running at 390,000 b/d in recent years nessee, to 400,000 b/d. Plains has also secured 95pc of the and will be expanded to 760,000 b/d. project's right-of-way, the company said earlier this month. A competing project, TC Energy’s 830,000 b/d Key- Diamond is co-owned by refiner Valero. stone XL pipeline, was suspended after President Joe The Diamond expansion is expected to enter service in Biden rescinded the project's cross-border presidential the fourth quarter of 2021. permit last month. TC Energy is assessing options on Plains is planning to add a 30-mile extension to connect Keystone XL, including selling the steel purchased for the Diamond to the reversed Capline. The Byhalia Connection will project, the company said last week. move crude from Memphis to Marshall County, Mississippi. Another controversial pipeline, Energy Transfer’s A reversed Capline will bring more prominence to St 570,000 b/d Dakota Access pipeline (DAPL), is moving James, which is already a major blending and logistics ahead with an expansion even as it faces a possible shut- hub, with nearly 40mn bl of storage and access to mul- down order in a federal court. tiple large-capacity pipelines. Energy Transfer is planning to increase capacity on DAPL St James is also an outlet for growing US oil exports. and to the connecting ETCOP line by as much as 1.1mn b/d Overall US crude exports have been resilient in the face by adding pump stations. DAPL moves Bakken crude to Pa- of the Covid-19 pandemic, breaking a record last year de- toka, Illinois, and ETCOP moves it from there to Nederland, spite the sharp drop in global demand. Texas. The company said its 2021 capital budget includes For the full year of 2020, total US crude exports aver- money for the expansion project. aged about 3.2mn b/d, up from 2.98mn b/d in 2019, the DAPL is facing a possible shutdown order after a federal previous record high, according to the most recent trade district court threw out a key easement last year and an data from the US Census Bureau. appeals court affirmed that decision. Aspects of the case By Eunice Bridges are pending in both courts, including a motion to shut the line while the US Army Corps of Engineers conducts the new ExxonMobil adds 2 new board members court-mandated environmental review. A key hearing on the ExxonMobil has added two new members to its board of issue was postponed until 9 April. directors as it faces growing pressure from investors to Energy Transfer said last week it does "not see a scenario change its investment strategy to improve returns and better where the pipeline will be shut in." address climate change-related challenges. The company is also moving forward with another pipe- Michael Angelakis, the chairman and chief executive of line project –- the 275,000 b/d Ted Collins Link -– which will private equity investment firm Atairos and a former Com- connect a terminal in the Houston Ship Channel to Neder- cast chief financial officer, will join ExxonMobil's board, land. The project capacity was scaled back and now includes along with Jeffrey Ubben, co-founder of private equity using some existing infrastructure to save costs. It should be firm Inclusive Capital Partners. in service in the fourth quarter of 2021. The addition of Angelakis and Ubben would bring the More crude will be heading from the midcontinent to board to 13 members. the US Gulf coast when Plains, Marathon and BP complete The move comes the same week as its annual investor's a reversal of the 1.2mn b/d Capline crude pipeline. The day meeting, on 3 March, where the company outlines its plan will allow crude to move southbound from Patoka, strategy and spending plans for the year ahead. Illinois, to St James, Louisiana. The move did not appease Engine No 1, an investment The Capline reversal advanced in the fourth quarter and firm that has been pressuring the company to improve its is backed by minimum volume commitments, Marathon said returns to shareholders and reorient itself to address the in a recent earnings call. The project is expected to start challenges of climate change. Engine No 1 has its own slate initial service in the first quarter of 2022. of four new board members it wants ExxonMobil to add. Plains is also doubling the capacity of its joint venture “While ExxonMobil has now conceded the need for board 200,000b/d Diamond crude pipeline with construction exchange, what is missing are directors with diverse track records

iNDUSTRY news of success in the energy industry who can position the company novating, and our climate challenge must be addressed,” she for success in a changing world," Engine No 1 said today. "We says, promising “to strike the right balance going forward”. remain confident our nominees bring the right experience and Haaland’s endorsement by Senate energy committee skills to help put ExxonMobil on a path to sustainable, long- chairman Joe Manchin — a Democrat from the coal mining term value creation for the benefit of all shareholders.” state of West Virginia who breaks from his party on climate But DE Shaw, another investor that has pressured Exx- and energy issues — keeps open a pathway to win narrow ap- onMobil to improve its financial performance, lauded the proval in the evenly split Senate. But arguments made by Re- addition of the new board members. publican senators at her confirmation hearings preview future "We welcome today's additions to the Exxon board of court battles over implementing Biden’s energy plans. directors," DE Shaw managing director Edwin Jager said. Industry officials complain about a slowdown in approvals "We believe these individuals will bring significant capital of federal drilling permits and uneven treatment of “sun- markets and capital allocation experience to the board dries”, which authorise minor changes to existing permits. room and will provide meaningful value to the company as The Interior Department’s temporary leadership installed it focuses on its investment priorities while navigating the by Biden has concentrated permitting decisions among a transition to a low-carbon future." handful of appointees, creating a decision-making bottle- By Tom Fowler neck, industry groups say. Bakken shale-focused Continental Resources is the first independent upstream producer to Industry mounts resistance to lease freeze challenge Biden’s order in courts. The department has not US producers and industry groups are gearing up for a legal responded to Continental’s request to approve 50 drilling fight to overturn President Joe Biden’s halt to most oil and gas permits it filed last year, the producer says. The firm chal- leasing on federal land, while interior secretary nominee Deb lenges Biden’s freeze more broadly as incompatible with the Haaland says no permanent leasing ban is in the works. US Minerals Leasing Act — a federal law that governs oil and “President Biden has put just a pause on new leases — he gas exploration on federal lands. did not ban new leases; he did not put a moratorium on new Republican lawmakers and industry officials are also leases,” Haaland told a Senate panel during her 23 Febru- directing their ire at legislation expedited by the House of ary confirmation hearing. The Senate process for nominees Representatives Democratic leadership that would designate to lead federal agencies tasked with implementing energy an additional 5,000km² of public land as wilderness area policy has become the first line of defence for opponents of off limits to mining and oil and gas exploration. The bill is Biden’s ambitious energy transition agenda. “in direct opposition to the multiple-use mandate given to Republican senators’ criticism of the freeze on new leases the Interior Department to manage the federal estate,” the stems from their belief that it augurs an eventual end to Independent Petroleum Association of America says. fossil fuel production on federal lands and waters, despite Haaland’s confirmation also previews a new argument assurances otherwise from Biden and his advisers. The that the industry is likely to make in opposition to Biden’s temporary freeze “is not an insignificant ‘pause’ but rather order to propose methane emission limits on oil and gas a multi-year ban through paralysis by analysis”, industry facilities. Producers’ ability to comply with methane rules group Western Energy Alliance says. The Interior Department depends on the ease of permitting for natural gas pipe- oversees federal and tribal lands and waters that in 2019 lines on public lands, Manchin says. accounted for 25pc of total US oil production, 14pc of natural By Haik Gugarats gas output and 40pc of coal mining. “There is no question that fossil energy does and will US carbon cost update eases path for rules continue to play a major role in America for years to come… I President Joe Biden’s administration may have an easier time know how important oil and gas revenues are to fund criti- issuing new climate rules by overhauling an economic metric cal services,” Haaland says — a nod to concerns expressed by named the “social cost of carbon." Democrats and Republicans from energy producing states that The White House last week released documents that esti- rely on taxing oil and gas output to fund their budgets. But mated the value of the metric, which reflects the societal Haaland says that Biden’s climate agenda cannot be imple- benefits of averting CO₂ emissions, would be $52/t under a mented without tweaking fossil fuel development on federal standard economic assumption, up from a $7/t value used by lands. “We must recognise that the energy industry is in- former president Donald Trump. The change is the first part

iNDUSTRY news of Biden’s push to revive a climate-focused working group of toward renewables, which will drive up the cost of capital government experts that Trump disbanded four years ago. for producers, said Marcel van Poecke, who oversees Car- The new values are a reversion to the same “social cost of lyle’s $2.5bn oil and gas fund outside of North America. carbon” estimates last revised in 2016, under former president “The world is changing,” van Poecke told a panel at Barack Obama, for the greenhouse gases CO₂, methane and ni- CERAWeek by IHS Markit. “We will have to work hard to con- trous oxide. The values increased primarily because Biden and vince [investors to come back] and it will be expensive.” Obama chose to count the global benefits of cutting emissions, After years of overexpansion and diminishing returns, US whereas Trump only counted climate benefits in the US. shale producers were hit hard by the global Covid-19 pan- “Just as we expect and encourage other countries to demic last year. The industry’s poor performance prompted consider the climate impact of their actions on us, we a broad flight of capital from the sector. should take the global benefits of our actions into account,” “A lot of the shale players looked awful at times,” invest- White House Council of Economic Advisers member Heather ment bank Tudor, Pickering, Holt chief executive Maynard Boushey said on 26 February. Holt said. The turmoil has been “seared into the minds of The higher price estimate is likely to play a key role as the every board member, every executive” in the industry. administration works on an aggressive timeline to roll out high- The big question is whether investors will return as the profile climate regulations. The administration plans to propose global economy rebounds, boosting oil demand. tougher fuel-economy standards by July and methane regulations Hess chief executive John Hess thinks so. Despite the on the oil and gas sector by September. The administration could pandemic and industry struggles of late, oil demand is still also rely on the newly-revived metric as it undertakes a compre- more than a decade from peaking, he said. Plus, the recent hensive review to a federal energy leasing program. economic stimulus efforts throughout the world, including a The US Environmental Protection Agency and other federal $1.9 trillion package the US Congress is considering, will only agencies are required to analyze the costs and benefits of regu- “turbocharge oil demand,” he said. lations they are considering. A higher “social cost of carbon” If anything, “we’re not investing enough,” in oil and value would make it easier for an agency justify issuing a regu- gas production, Hess said. lation with a high price tag, since some of those costs would be But Hess also acknowledged that the US shale industry offset by the benefit of averting some climate damage. has transformed from a growth business to a "harvest” busi- The Biden administration, in its updated values, said ness. Companies that focus on returns and generating cash emissions of CO₂ avoided this year would be worth $52/t us- will the be ones that win back shareholders, he said. ing a standard 3pc “discount rate” for valuing future benefits Whether energy, technology or financial services, inves- of climate change. But it said the value could drop to as low tors fundamentally want returns, Hess said. So as long as as $15/t using a 7pc discount rate, or up to $155/t under a producers stick to these basics, they should be fine, he said. worst-case scenario for climate damages. “The sector will get a new look,” Holt said. “But it will The White House plans to later make more comprehen- take a while for investors to re-embrace” the sector. sive updates to its social cost of carbon values, but said it By Thomas Lee would require time and public input. Separately, the Biden administration on 26 February held its Alberta crude drilling returned to form first meeting of an interagency working group focused on revi- Crude drilling activity in Alberta was down by only four wells talizing the economies of areas heavily dependent on coal, oil in December compared to the same month in 2019, as crude and gas development. The working group discussed using loans, price gains accelerated the recovery from the pandemic. grants, technical assistance, financing and other programs to A total of 160 wells were drilled in December, compa- help those areas, according to a White House summary. rable to the 164 drilled in the same month in 2019 and 166 By Chris Knight drilled in December 2018. Drilling was down by 15 wells from November, not uncommon as activity typically slumps Investors not expected to return to oil soon to close the year, according to statistics from the Alberta The oil and gas industry faces a long struggle to win back Energy Regulator (AER) dating back to 2000. investors even if demand and prices recover, a top executive Drilling activity had been on the upswing since hitting with private equity giant Carlyle Group said today. a record low of only four wells drilled in April. But the gap Investors and banks have been redirecting their money between previous years remained wide, peaking in August

iNDUSTRY news when drilling typically starts to pick up. Only 299 wells shipments of fuel imported from the US are due. drilled that month, 269 fewer than in August 2019. Haiti produces no oil to meet some 60,000 b/d of There were 70 wells targeting bitumen in December, up demand. Until March 2018, Haiti relied on Venezuelan fuel by 64 from December 2019 but down from 108 in November. through the PetroCaribe subsidized oil supply scheme. Ven- Conventional drilling totaled 90 wells in December, ezuela itself is now acutely short of motor fuel. down by 10 wells from the same month in 2019, but up The Dominican Republic operates a 34,000 b/d refinery from 67 wells in November. and tops off some 155,000 b/d of demand withimports . Pricing of heavy sour crude at Hardisty, Alberta, has sta- By Canute James bilized since bottoming out at $3.54/bl in April last year. In the second half of 2020, prices settled at an average of $32/ Petrobras recovers $65mn from Samsung deal bl, including the year's high of $37.37/bl in December. Brazil’s state-controlled Petrobras has recovered around A total of 1,423 wells have been drilled in 2020, just over R360mn ($65mn) from South Korean shipbuilding giant half of the 2,555 wells drilled the year before. Activity in Samsung Heavy Industries as part of a corruption-related 2016 was lower at 1,684 wells. leniency deal with federal prosecutors. An average of 3,181 wells per year were drilled over On 22 February, Samsung reached a plea agreement the past 10 years, but a marked difference has been seen totaling around $145mn for “practices of corruption and in the past six years, marking a new normal for Alberta money laundering,” the Brazilian prosecutors said. Petro- industry. From 2011 to 2014, inclusive, an average of 4,584 bras is expected to receive another R345mn installment wells were drilled each year, compared to 2015 to 2020, from the Korean firm this month. inclusive, when 2,245 wells were drilled. Samsung made illicit payments to Brazilian politicians By Brett Holmes to secure drillship construction contracts in 2006 and 2007, investigators uncovered in 2015. DomRep bets on wall with Haiti to curb theft To date, Petrobras has recovered around R5.3bn from leni- A wall to be built by the Dominican Republic along its border ency and repatriation agreements executed within the scope with Haiti will thwart smuggling of Dominican gasoline and of the sweeping corruption investigation known as Lavo Jato diesel, the Dominican energy ministry told Argus today. (Car Wash). The company has said it hopes to recover more The countries share the island of Hispaniola. than R40bn in losses and fines related to the systemic kickback Construction of the 235-mile wall will begin by end of scheme that directly and indirectly cost the firm around $20bn. 2021, and it is intended to curb illegal immigration, drug The recovery of the funds comes on the eve of a trafficking and the movement of stolen vehicles, conserva- controversial managerial transition in Petrobras, where tive Dominican president Luis Abinader said on 26 February. presidential nominee and former army general Joaquim “One impact of the barrier will be curbing the theft of our Silva e Luna is likely to replace current chief executive fuel that has worsened in the past three years with increasing Roberto Castello Branco on 21 March. fuel shortages in Haiti,” the ministry told Argus. “Retailers By Nathan Walters of gasoline and diesel located in the center and west of the country have been the main victims of the smuggling.” Iran swaps gasoline for Venezuelan jet fuel Dominican authorities have frequently closed border points Iran delivered more gasoline to Venezuela late last month, to reduce fuel smuggling and have seized fuel from smugglers. picking up jet fuel in exchange. “The wall in intended to end this problem that has The Iran-flagged Forest, one of Iranian state-owned NI- been a curse on the profitability of our fuel retail sec- OC’s vessels that has supplied irregular shipments of gasoline tor,” the ministry said. to Venezuela since mid-2020, unloaded 277,000 bl of gaso- Irregular Haitian migration to the Dominican Republic line at Venezuelan state-owned PdV’s El Palito terminal on has grown since January with growing political unrest as 20 February, according to shipping data obtained by Argus. protesters seek the removal of President Jovenel Moise. The tanker is currently loading 130,000 bl of jet-A1 at A delay in legislative elections due in 2018 has left the PdV’s Cardon terminal for transport to Malaysia. country without a parliament. Two other Iranian tankers, the Faxon and the Fortune, de- Long lines of motor vehicles and motorcycles are com- livered over 400,000 bl of gasoline to PdV at the end of Janu- mon at Haiti's petrol stations, particularly when intermittent ary and departed with jet fuel cargoes earmarked for delivery

iNDUSTRY news to Iran, according to PdV bills of lading seen by Argus. PdV and NIOC expect to expand their swap trade volumes PdV is using Iranian tankers that travel to and from this year including refined products and crude as PdV brings Venezuelan terminals with their transponders switched off in more downstream capacity back on stream and raises crude what the oil ministry describes as “controlled fleet opera- production, a senior Venezuelan oil ministry official said. tions” meant to defy US sanctions against the two countries. "The US sanctions are hurting the Venezuelan people PdV has substantial jet fuel stocks since the Covid-19 pan- but will not prevent us from strengthening oil relations with demic grounded nearly all Venezuelan domestic and interna- Iran," the ministry official added. tional commercial flights almost a year ago. Jet-A1 stocks at Caracas paid for initial deliveries of Iranian gasoline the 940,000 b/d CRP refining complex in Falcon state, which to Venezuela in May-June 2020 with gold, Venezuelan includes the 305,000 b/d Cardon refinery and 635,000 b/d officials have said. Amuay refinery, also have been increasing since PdV repair Since December, Venezuela has restored some flights to crews on 22 February restarted a kerosene treatment unit a handful of destinations, including the Dominican Republic, which had been out of service since the end of 2019. Panama, Mexico, Bolivia and Turkey.

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