Oil giants will pay more for UAE oil as 75-year pact ends

The largest U.S. and European oil companies will pay more for Abu Dhabi crude when the end of a 75-year partnership reduces their direct stakes in the emirate’s output, according to two people with knowledge of the matter.

Exxon Mobil Corp., BP Plc, Royal Dutch Shell Plc and Total SA lose their rights as shareholders in the company operating Abu Dhabi’s onshore oil fields after their joint venture expires this week. The international companies will then start paying a premium of 11 cents a barrel over Abu Dhabi’s official selling price for Murban grade crude, the two people said, declining to be identified because the contract terms are private.

Supply glut: OPEC pumps least crude in more than 2 years

“As long as their crude price is reasonably competitive and they’re feeding their trading arms, it’s something they can deal with,” Robin Mills, head of consulting at Manaar Energy Consulting and Project Management, said by telephone from Dubai today. “The companies will be betting that they can trade the crude to add more than 11 cents of value.”

The end of an accord accounting for more than half of the output from OPEC’s fourth-largest supplier further weakens, at least temporarily, the role of international companies in the group, as member nations seek to retain more oil wealth. Abu Dhabi holds most of the reserves in the United Arab Emirates, which pumped 2.76 million barrels a day in December, or 9.2 percent of all oil supplied by the Organization of Petroleum Exporting Countries, according to data compiled by Bloomberg.

via Fuel Fix » Oil giants will pay more for UAE oil as 75-year pact ends.

Categories: Energy, Transportation