Platts to increase Forties de-escalator April 1

Effective April 1, 2012, the sulfur de-escalator to be applied in Forties cargoes and related instruments in the Platts North Sea assessment process will be $0.40/barrel per 0.1% weight of sulfur over the 0.6% wt standard, $0.15/b up from the current de-escalator value of $0.25/b, which has been in place since December 1, 2011.

Platts has revised the de-escalator in light of the recent widening differential between low- and high-sulfur crudes and products. Additionally, markets continue to react to the March 25 closure of Total's Elgin field in the UK North Sea. Elgin was evacuated and closed because of a gas leak. The project normally provides an estimated 75,000 b/d of condensate into the Forties Pipeline System, making up a significant part of the benchmark Forties crude blend.

Platts' guidelines for its sulfur de-escalator use three significant figures for determination of sulfur-related payment. The test reflecting this figure should be the ASTM-D2622. Forties cargoes and all related instruments, including BFOE cash forwards, bid or offered through the Platts system must adhere to this standard. In addition, Platts will publish the sulfur de-escalator, representing the dollar value per 0.1% weight of sulfur, in its crude oil publications.

Please send comments to europe_crude@platts.com and pricegroup@platts.com.