Sakhalin crude a/c MRPL - a new frontier

Finally, long awaited cargo hit the market this afternoon.

MRPL - 90KMT - SOKOL CRUDE - STS YOSU/NMP - 4-10 DEC, 2006 TBN 2DAYS- 96HRS SHINC- REPLY 1030 IST TMRW(9 NOV.)

On September 29, ONGC had floated a tender to sell 700,000 barrels of Sokol crude oil for loading from the De Kastri Terminal SKOL SBM, on C&F basis which was cancelled after receiving low bids. ONGC thought it to be rather fit for self consumption. The cargo is expected to be loaded around Nov. 22 for its majority owned refinery in Mangalore (MRPL).

ONGC is likely to bring some cargoes into its domestic refining system, despite the relatively high freight costs, amid political pressure to improve its energy security. However, the news was a disappointment to Asian crude traders who had hoped the sale might shed some light on values for the light-sweet crude, several cargoes of which have been sold into Japan without any details emerging on prices.

ONGC has a 20 % stake in the ExxonMobil-led Sakhalin-I field, which began loading its first cargo of export crude after a several-month delay. It is due to pump about 250,000 bpd by year-end. Ultimately most believe that import-dependent Japan will be the main market for the grade, likely to put added pressure on Abu Dhabi light sour Murban crude, a similar grade.

ExxonMobil has a 30 % stake in Sakhalin-I, while a Japanese consortium of traders and energy firms called Sodeco owns another 30 %.Russian state oil firm Rosneft holds 20 %.

ONGC has awarded its third Dec. tender to sell 700,000 barrels of Sokol crude to ExxonMobil at a $4-4.25 premium to Oman/Dubai quotes.