Platts, the energy information division of The McGraw-Hill Companies, plans to launch a price assessment for the new Russian crude oil which is slated to start flowing to Asian markets on December 16.

The new crude stream, East Siberian Pipeline Oil (ESPO), will be
exported from the port of Kuzmino near Vladivostok in Russia’s Far East
at an initial rate of 300,000 barrels per day.

Platts, a leading global oil information provider with a 100-year
history of assessing physical energy and metals prices, has been
working closely with Russian energy ministry officials and producers in
the planning of this new crude assessment and will provide transparent
price discovery for the new oil stream.

“We’ve been holding discussions with the Russian authorities and
producers for over a year and we plan to publish a new price assessment
as soon as the shipments begin,” said Jorge Montepeque, Platts Global
Editorial Director for Markets. “The Asian markets are heavily
dependent on imported oil and the role of Russian oil has been growing
in recent years. The Eastern Siberian Pacific Ocean pipeline will
enable supplies from the Eastern Siberian fields to supply some of the
rapidly growing energy needs in Asia.”

Platts estimates that the shipments of the new stream will likely rise
to 600,000 barrels/day over the next few years, with a substantial part
of East Siberian Pipeline Oil expected to be bound initially for China.

“We view the ESPO project as an important step towards diversifying the
outlets for Russia’s crude oil market, demonstrating the increasing
role that Russian oil plays in the world’s supply needs,” said Mr.
Vitalii Vasilievich Karaganov director of the department of oil and oil
products processing at Russia’s Ministry of Energy.

“Initially, we expect ESPO pricing to be a differential to commonly
used benchmarks such as Platts Dubai and Platts Dated Brent, but due to
its location, ample production levels and wide equity ownership, it has
the elements that could help it become a major price indicator in
Asia,” said Montepeque.

Platts Dubai and Platts Dated Brent are recognized by the global oil
industry as benchmarks against which other oil grades and refined
products are referenced. While many grades of oil and pricing
references exist worldwide, benchmark status of an oil or price
assessment is determined by industry acceptance and adoption in the
open marketplace.

Source: Platts

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