East Coast Canadian crude trades in Platts MOC for first time amid stable production

An August-loading cargo of Hibernia crude traded during the Platts Market on Close assessment process June 3, the first ever trade of Eastern Canadian crude in the MOC, amid stable production following technical setbacks in 2019 and slack demand in 2020.

Equinor offered the 675,000-barrel cargo of Hibernia loading between Aug. 1-5 on an FOB Whiffen Head basis at Dated Brent minus 85 cents/b in the MOC process. Prior to the MOC deadline, Mercuria Energy Trading lifted the offer.

S&P Global Platts assesses Hibernia based on spot transactions for cargoes loading 30 to 60 days forward. The published differential is based on a 33 to 63 day Dated Brent Strip. Platts assessed Hibernia at Dated Brent strip minus 85 cents/b June 3, down 10 cents/b. In April of 2020, the Hibernia differential fell to as low as a discount of $4.85/b to the Eastern Canadian Dated Brent strip, as demand from Atlantic Basin refiners evaporated in the wake of the coronavirus.

Hibernia crude is produced offshore the East Coast of Canada near Newfoundland and has a typical API gravity of 34.1 degrees and a 0.56% sulfur content, according to recent assays. Hibernia barrels are generally offered to the waterborne market from Whiffen Head, Newfoundland.

The Hibernia grade is rebounding from several setbacks, including production cuts following spills in 2019 and weak demand from the coronavirus pandemic in 2020.

The Hibernia Field produced about 100,376 b/d in April, according to the latest statistics available from the Canada Newfoundland and Labrador Offshore Petroleum Board, recovering from as low as 90,283 b/d in July of last year.

The Hibernia platform suffered several spills in 2019 that halted production and prompted the regulator to require Hibernia Management and Development Co. to conduct a review of all systems, maintenance equipment and personnel training. The field produced just 5,763 b/d in August of 2019.

Hibernia production began in November 1997. It is a joint venture owned by ExxonMobil (33.125%), Chevron (26.875%), Suncor (20%), Canada Hibernia Holding Corp. (8.5%), Murphy Oil (6.5%) and Equinor (5%).

Hibernia production has been surpassed by the heavier Hebron grade offshore Canada, which was first produced offshore Newfoundland and Labrador in November 2017. Hebron production reached around 141,582 b/d in April, according to the regulator.

US refiners, mainly on the East Coast, have imported just over 12 million barrels of Hibernia crude this year through May 17, according to the latest US Customs and S&P Global Platts Analytics data. That compares with 26.8 million barrels imported in all of 2020.