Platts to amend Cinta, Widuri crude assessment methodology from Jul 1

In response to changing physical market conditions, S&P Global Platts will amend the methodology for its assessments of Indonesia's Cinta and Widuri crude oil grades from July 1, 2020.

Platts existing assessments for Cinta and Widuri reflect cargoes of the grade on FOB basis and sold in the open market. However, Platts no longer observes sufficient spot information to sustain independent assessments for these oil grades.

Platts first announced plans to launch the MPP assessments in a subscriber note published February 7, 2020: http://plts.co/KWhg30qxl5v

Oil production from the Southeast Sumatra, or SES, working area, which produces Cinta and Widuri crudes, has fallen from a peak of around 244,000 b/d in July 1991 to around 27,000-28,000 b/d in 2019, according to data from Indonesia.

Exports of both crude oil grades have ceased following the expiry of operator CNOOC's SES production sharing contract in September 2018.

Oil produced from the SES working area, which is now operated by Pertamina's subsidiary PT Pertamina Hulu Energi Offshore Southeast Sumatra, is domestically processed at Pertamina's refineries.

From July 1, 2020, Platts will calculate a daily value for Cinta and Widuri using a Market Parity Price, or MPP, model, instead of assessing the grade through its existing Platts Market on Close assessment process. As a result of this change, Platts will no longer consider bids, offers and trades for spot cargoes of the grade. Platts will continue to report on any spot market transactions for these grades, but this information will not be used in the daily calculation of the MPP.

The MPP calculation for both the grades will be based on the grade's Gross Product Worth benchmarked to a reference basket of relevant crude grades that are actively traded in the regional spot market. These will initially include Russia's ESPO, Abu Dhabi's Murban and Malaysia's Kimanis. The three basket grades, Cinta, Widuri and their GPW will be normalized for delivery to Japan, accounting for freight and regional spot product prices.

The MPP model, which Platts also uses to assess certain illiquid crude oil grades from West Africa and India, as well as Indonesia's Minas crude and Mexico's Maya crude, will ensure that the assessment captures both the inherent refining value of the crude as well as the broader oil market demand-supply fundamentals reflected in the price of the reference basket.

To learn more about Platts Market Parity Price assessments, click on https://bit.ly/33GZehH

Platts will review the MPP models for Cinta and Widuri annually to ensure they continue to reflect prevailing market conditions and quality of the crude grades.

The Cinta and Widuri MPP assessments will be published under the existing codes below for Platts Cinta and Widuri assessments in Platts Crude Oil Marketwire, Platts Oilgram Price Report and on Platts Global Alert pages 1250, 1805, 2210, 2211, 2216, 2217, 2244, 2245, 2264 and 2265.

The methodology for Platts Cinta and Widuri assessments at London close, which takes into account the movement in the underlying Brent benchmark from Asia close to the European market close at 1630 hours London time, remains unchanged.

Alongside the change in the assessment methodology for Cinta and Widuri, Platts will also discontinue the following differentials assessments for the grade from July 1, 2020:

Please send all comments or questions to Asia_Crude@spglobal.com and pricegroup@spglobal.com.

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