Abu Dhabi National Oil Company (ArDNOC) and nine of the world's biggest energy traders-including BP, Shell, Total, and Vitol-are partnering to launch a crude oil futures exchange in Abu Dhabi, operator Intercontinental Exchange ICE said on Monday.
The ICE Futures Abu Dhabi will host the world's first Murban crude oil futures contracts.
Abu Dhabi's Supreme Petroleum Council (SPC) has decided to list ADNOC's Murban crude grade as a futures contract on an internationally recognized exchange, ADNOC said last week, adding that this would unlock "greater value for its customers, ADNOC and the UAE."
The Murban futures contract could be a successful crude oil benchmark as it has all the right characteristics, including high volumes and the potential for spot trading, analysts say.
The ten companies partnering with the new ICE-operated crude oil futures exchange are ADNOC, BP, GS Caltex, INPEX, JXTG, PetroChina, PTT, Shell, TOTSA (Total), and Vitol, the exchange operator said in a statement.
ICE plans to launch ICE Futures Abu Dhabi and ICE Murban futures in the first half of 2020, subject to relevant regulatory approvals.
"Partnering with ADNOC and nine of the world's largest physical traders of Murban crude to launch ICE Futures Abu Dhabi is a significant endorsement and strong signal of the potential for Murban to become a new global crude benchmark," Jeffrey C. Sprecher, Chairman and CEO at Intercontinental Exchange, said. Related: The One Metric That Matters For Electric Cars
ADNOC and Abu Dhabi hope the new Murban oil futures contract will one day become a region-wide benchmark.
"Having a new, independent exchange in Abu Dhabi will not only benefit the UAE, but also physical and financial oil traders around the world," said Dr. Sultan Ahmed Al Jaber, UAE Minister of State and ADNOC Group CEO.
ADNOC's Murban Crude-a light sweet crude-accounts for more than half of ADNOC's daily oil production. ADNOC pumps some 1.7 million bpd of Murban crude out of its total production of around 3 million bpd.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More