BHP Billiton Plc intends to export condensate from the US, which will make it the first company to ship the fuel to overseas markets without getting an express permission from federal regulatory authorities.
A person with knowledge of the trade, who asked not to be named because the information is still private, reported that BHP sold a cargo after it made the decision that it is a processed product, which is suitable for export even without securing a special permission from the Commerce Department. A spokeswoman for the company made an e-mailed statement today and revealed that BHP intends to export condensate from the Eagle Ford formation in Texas.
The transaction of BHP to sell about $50 million of ultralight oil from Texas to overseas customers without getting a specific formal government approval is likely to be only the beginning of many such moves. It happens at a time when most energy companies are trying to find new markets and higher prices in order to expand their reach considering the sharp increase in US crude output.
As reported by the Financial Times, BHP said in a statement: “After taking the necessary time to thoroughly examine the issues involved, we concluded that processed condensate is eligible for export. BHP Billiton has worked through a robust due diligence, secured a dedicated supply chain, and has taken steps to ensure the quality of our product for export.”
The company, which is currently the biggest non-US-based producer in the prolific Eagle Ford Shale of Texas, is considered to be seeking to consolidate its positions through self-classification without getting a regulatory ruling.
Opinions in Washington of whether to allow US oil exports, which have been restricted since the Arab oil embargo in the 1970s, have been quite ambivalent. The larger oil producers have called on authorities to put an end to the ban. Others, however, have shared their concerns that such exports would accelerate the increase of gasoline prices in the US, which will in turn hurt the common customers.
BHP Billiton Plc added 0.16% to trade at GBX 1 613.0 per share at 13:54 GMT, marking a one-year change of -18.12%. The company is valued at GBP 93.18 billion.
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