IDE U ARGUS CRUDE Contents: Methodology overview 2 Overview 6 Pricing tables 6 Futures markets 6 Forward spreads 6 Forward markets 6 North Sea 7 Russia-Caspian 11 Mediterranean 14 West Africa 15 Mideast Gulf 16 Asia-Pacific 20 RussiaAsia-Pacific 25 Officialformulaprices 26 Officialsellingprices 26 Reference prices 27 Argus Japanese Crude Cocktail Index 27 (Argus JCC) 27 Americas 27 OGY AND SPECIFICATIONS G AND SPECIFICATIONS OGY Daily netbacks 27 L Argus intra-day North Sea forward physical crude assessments 28 ETHODO LAST UPDATED: SEPTEMBER 2021 The most up-to-date Argus Crude methodology is available on www.argusmedia.com M www.argusmedia.com 19 January 2005 METHODOLOGY AND SPECIFIcatIONS GUIDE September 2021 Methodology overview Throughout all markets, Argus is constantly seeking to increase the number of companies willing to provide market data. Report- Methodology rationale ers are mentored and held accountable for expanding their pool Argus strives to construct methodologies that reflect the way the of contacts. The number of entities providing market data can vary market trades. Argus aims to produce price assessments which are significantly from day to day based on market conditions. Should reliable indicators of commodity market values, free from distortion the number of entities providing market data repeatedly fall to a and representative of spot market values. As a result, the specific level that assessment quality may be affected, supervising editors currencies, volume units, locations and other particulars of an as- will review the viability of the assessment. sessment are determined by industry consensus to facilitate seam- less bilateral trade and Argus mirrors these industry conventions. For certain price assessments identified by local management, shouldmorethan50pcofthemarketdatauponwhichtheas- In the global crude markets, Argus reflects physical market prices sessment is based come from a single entity, then the supervising employing a range of methodologies. These include time stamped editor will engage in an analysis of the market data with the primary bid/ask ranges, averages of deals done in a window, volume- reporter to ensure that the quality and integrity of the assessment weighted averages of deals done over the entire day as well as cu- has not been affected. mulative transaction averages across a month and cumulative daily averages. The rationale for each methodology will vary by market. Argus has committed to deliver many of our final published prices to clients by a particular deadline each day. Because compiling and Argus often applies crude basis differentials to various prices – such confirming transactions and other market data in advance of this as WTI and North Sea Dated – to arrive at fixed prices because this deadline is a lengthy process, price assessment procedures must is a representative method of converting differential prices into fixed be concluded well before that deadline. As a result, Argus has insti- price assessments tuted cut-off times for the submission of data by market participants. Argus will review all data received after the cut-off time and will When Argus uses a deals based approach for price identification make best efforts to include in the assessment process all verifi- deals must meet the minimum volume, delivery, timing, and speci- able transactions and market data received after the cut-off time but fication requirements in our methodology and the deals must be reserves the right to exclude any market data from the process if bona fide. The same requirements apply to most volume-weighted received after the cut-off time. averages. The time period used to produce representative price indications is Market data usage that which in the opinion of Argus, following consultation with market In each market, Argus uses the methodological approach deemed participants, can be used to produce a reliable indicator of physical to be the most reliable and representative for that market. Argus will market value. utilise various types of market data in its methodologies, to include: Argus will announce its publishing schedule in a calendar located 1. Transactions at www.argusmedia.com. Argus may not assess prices on certain 2. Bids and offers public holidays even when the exchanges are open, due to antici- 3. Other market information, to include spread values between pated illiquidity in the cash spot markets. grades, locations, timings, and many other data. In many markets, the relevant methodology will assign a relatively Survey process higher importance to transactions over bids and offers, and a Argus price assessments are informed by information received relatively higher importance to bids and offers over other market from a wide cross section of market participants, including produc- information. Certain markets however will exist for which such a ers, consumers and intermediaries. Argus reporters engage with hierarchy would produce unreliable and non-representative price as- the industry by proactively polling participants for market data. sessments, and so the methodology must assign a different relative Argus will contact and accept market data from all credible market importance in order to ensure the quality and integrity of the price sources including front and back office of market participants and assessment. And even in markets for which the hierarchy normally brokers. Argus will also receive market data from electronic trading obtains, certain market situations will at times emerge for which the platforms and directly from the back offices of market participants. strict hierarchy would produce non-representative prices, requiring Argus will accept market data by telephone, instant messenger, Argus to adapt in order to publish representative prices. email or other means. Argus encourages all sources of market data to submit all market Verification of transaction data data to which they are a party that falls within the Argus stated Reporters carefully analyse all data submitted to the price assess- methodological criteria for the relevant assessment. Argus encour- ment process. This data includes transactions, bids, offers, vol- ages all sources of market data to submit transaction data from umes, counterparties, specifications and any other information that back office functions when and where possible. contributes materially to the determination of price. This high level 2 www.argusmedia.com 19 January 2005 METHODOLOGY AND SPECIFIcatIONS GUIDE September 2021 of care applies regardless of the methodology employed. Specific l The impact of non-market factors on price or volume, includ- to transactions, bids, and offers, reporters seek to verify the price, ing distressed delivery, credit issues, scheduling issues, the volume, the specifications, location basis, and counterparty. In demurrage, or containment. some transactional average methodologies, reporters also examine the full array of transactions to match counterparties and arrive at a Source tests list of unique transactions. l The credibility of the explanation provided for the outlying nature of the transaction. Several tests are applied by reporters in all markets to transactional l The track record of the source. Sources will be deemed data to determine if it should be subjected to further scrutiny. If a more credible if they transaction has been identified as failing such a test, it will receive o Regularly provide transaction data with few errors. further scrutiny. For certain price assessments identified by local o Provide data by Argus’ established deadline. management, Argus has established internal procedures that o Quickly respond to queries from Argus reporters. involve escalation of inquiry within the source’s company and o Have staff designated to respond to such queries. escalating review within Argus management. Should this process l How close the information receipt is to the deadline for in- determine that a transaction should be excluded from the price as- formation, and the impact of that proximity on the validation sessment process, the supervising editor will initiate approval and, if process. necessary, documentation procedures. Primary tests applied by reporters Assessment guidelines l Transactions not transacted at arms-length, including deals When insufficient, inadequate, or no transaction information exists, between related parties or affiliates. or when a transaction based methodology will not produce repre- l Transaction prices that deviate significantly from the mean of sentative prices, Argus reporters will make an assessment of market all transactions submitted for that day. value by applying intelligent judgment based on a broad array of l Transaction prices that fall outside of the generally observed factual market information. Reporters must use a high degree of lows and highs that operated throughout the trading day. care in gathering and validating all market data used in determin- l Transactions that are suspected to be a leg of another trans- ing price assessments, a degree of care equal to that applying to action or in some way contingent on an unknown transac- gathering and validating transactions. The information used to form tion. an assessment could include deals done, bids, offers, tenders, l Single deal volumes that significantly exceed the typical spread trades, exchange trades, fundamental supply and demand transaction volume for that market. information and other inputs. l Transaction details that are identified by other market partici- pants as being