• 3 minutes China has *Already* Lost the Trade War. Meantime, the U.S. Might Sanction China’s Largest Oil Company
  • 7 minutes Saudi and UAE pressure to get US support for Oil quotas is reportedly on..
  • 11 minutes China devalues currency to lower prices to address new tariffs. But doesn't help. Here is why. . . .
  • 15 minutes What is your current outlook as a day trader for WTI
  • 29 mins In The Bright Of New Administration Rules: Immigrants as Economic Contributors
  • 3 hours Will Uncle Sam Step Up and Cut Production
  • 8 hours Domino Effect: Rashida Tlaib Rejects Israel's Offer For 'Humanitarian' Visit To West Bank
  • 4 mins Long Range Attack On Saudi Oil Field Ends War On Yemen
  • 8 hours Gretta Thunbergs zero carbon voyage carbon foot print of carbon fibre manufacture
  • 3 hours CLIMATE PANIC! ELEVENTY!!! "250,000 people die a year due to the climate crisis"
  • 8 hours Continental Resource's Hamm wants shale to cut production. . . He can't compete with peers.
  • 14 hours NATGAS, LNG, Technology, benefits etc , cleaner global energy fuel
  • 22 hours Significant: Boeing Delays Delivery Of Ultra-Long-Range Version Of 777X
  • 1 day Strait Of Hormuz As a Breakpoint: Germany Not Taking Part In U.S. Naval Mission
  • 21 hours Why Oil is Falling (including conspiracy theories and other fun stuff)
  • 12 hours Trump vs. Xi Trade Battle, Running Commentary from Conservative Tree House
  • 4 hours US Petroleum Demand Strongest Since 2007
The Revival Of A $53 Billion Megaproject

The Revival Of A $53 Billion Megaproject

The Iraqi government is still…

Texas Crude Is Fetching Better Prices

Texas Crude Is Fetching Better Prices

New midstream capacity allows more…

BP And Monroe Energy Lock Horns Over Oil Supply Contract

BP Tanker

BP has filed a lawsuit against Monroe Energy in a federal court, claiming the refiner wrongfully terminated a contract last year. This has become the latest in a string of lawsuits involving the Pennsylvania refinery that Monroe Energy operates, brought about, according to some authors, by the fall in oil prices since 2014.

In the BP case, the UK-based major accused the refiner of using an “unfounded pretext” to cancel the three-year contract that has caused BP damages worth $59 million, its own estimates showed.

From Monroe’s perspective, things look differently. The refiner agreed back in 2014 to buy 185,000 bpd of crude produced by BP in the Bakken and Eagle Ford shale plays, both at a premium to the Brent benchmark: $8.35 for Eagle Ford crude and $7.35 for Bakken crude.

That was in 2014, before prices started sliding. After that, the spread between Brent and WTI narrowed and the premium stopped looking so good for Monroe and its sector players. Imported crude, however, from West Africa mostly, started looking increasingly like a good bargain, especially as the cost of domestic supplies was also pumped up by the fact that the crude was transported by rail – a more expensive channel than pipelines and tankers.

Last June, Monroe cancelled its contract with BP, stating that the crude that the company supplied failed to meet the API gravity grade requirements that were stipulated in the document. BP, for its part, countered that there was no requirement to keep crude from different fields separate, and that mixing grades from different wells was standard practice.

The oil giant also said that Monroe was using gravity figures measured in Texas rather than at the point of delivery, which was another stipulation in the contract. Also, BP said, Monroe had not complained before about the blend of crude oil grades that BP supplied to its Pennsylvania refinery.

Related: Attack On Syria: U.S. Has Returned To “Business As Usual”

However, Reuters recalls that another refiner, NARL Refining, also complained that BP’s crude failed to meet gravity grade requirements and damaged the equipment in its refinery. The two are currently involved in an arbitration dispute.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage

Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News
Download on the App Store Get it on Google Play