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Indonesia mulls changes to crude price basket; Banyu Urip ICP eyed

Reuters  |  JAKARTA/SINGAPORE 

JAKARTA/(Reuters) - is evaluating its existing crude benchmarks, and has identified the Banyu Urip grade as possibly one that could replace Arjuna ICP, a senior official said.

"Relating to Banyu Urip crude to be the benchmark crude to replace Arjuna, at this time it's still being evaluated by the technical team," Ego Syahrial, Director General of and Gas at the energy ministry, said.

The earliest decision could come in December, but not later than next June, Syahrial added.

In the meantime, will keep its existing Crude Price (ICP) formula unchanged.

Monthly ICPs for the key benchmark grades: Minas, Duri, Widuri, Cinta, Arjuna, Attaka, Belida and Senipah condensate are currently calculated by applying a differential to dated Brent quotes published by price agency S&P Global Platts.

changed to its current pricing formula in July 2016, the first change to the formula since 2007.

While has not explicitly stated how it calculates its monthly price differential to dated Brent, market participants say the differentials track the average of price quotes published by Platts and Japanese energy information provider RIM Intelligence.

RIM Intelligence is the only pricing agency to publish a price for Banyu Urip crude. Platts did not immediately reply to a query on whether it would start a Banyu Urip price assessment.

The Banyu Urip field, operated by ExxonMobil and located in the Cepu block in East Java, first began exporting cargoes in early 2015. Output from the project stands around 200,000 barrels per day (bpd) and is crucial to Indonesia, which faces declining production from aging wells.

"A switch from Arjuna makes sense because Banyu Urip has a bigger production," an analyst from a Western firm said.

The grade is also offered on the spot market more regularly than other benchmark Indonesian grades and has a broad customer base as refiners in Thailand, China, and Malaysia have purchased the grade, Thomson trade flows data shows.

(Reporting by Mark Tay and Wilda Asmarini, editing by David Evans)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

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