Subscriber note: Platts proposes to launch Oseberg, Ekofisk escalators for June Brent BFOE

Platts proposes to introduce price escalators reflecting quality premiums for Oseberg and Ekofisk crude oils in its North Sea Dated Brent, cash Brent (BFOE) and related assessment processes for cargoes loading from June 2013 onwards. Following an extensive period of bilateral engagement with participants in the marketplace, public forums held in London last year and after reviewing public proposals, Platts proposes to publish at the beginning of each month a set of escalators for cargoes loading the following month (month after). Escalators would be paid by buyer to seller for nomination and delivery of Oseberg and Ekofisk into a physical BFOE transaction. The escalators would be considered in the assessment process for Dated Brent and related instruments as well. No escalator is contemplated for Brent or Forties. Oseberg and Ekofisk escalators would be established by observing the net price differences between these typically premium grades and the most competitive grade of crude among Brent, Forties, Oseberg and Ekofisk during the full month prior to announcement. Escalators for Oseberg and Ekofisk would be published at 50% of the observed premiums for those two crudes to the most competitive BFOE crude oil. No escalator would be announced if the observed price difference between the grades is less than 50 cents/barrel. As an example, under this proposal Platts would observe price differences between the crude grades during the month of April, and announce Oseberg and Ekofisk escalators on the first business day of May, for cargoes loading in June. This proposed calendar aligns with typical trading practices, where June cargoes are primarily traded in the month of May. Platts is also considering a mid- and end-year review of escalators to publicly analyze, review and address any application issues. Platts will review all comments received up to March 10, 2013, and create a website repository for those wishing to submit written comments for public view. Please send all comments and queries to europe_crude@platts.com and pricegroup@platts.com, with a clear indication if comments are intended for publication by Platts for public review, if desired.