• 3 minutes e-car sales collapse
  • 6 minutes America Is Exceptional in Its Political Divide
  • 11 minutes Perovskites, a ‘dirt cheap’ alternative to silicon, just got a lot more efficient
  • 5 hours GREEN NEW DEAL = BLIZZARD OF LIES
  • 7 days The United States produced more crude oil than any nation, at any time.
  • 6 days How Far Have We Really Gotten With Alternative Energy
  • 17 hours e-truck insanity
  • 7 days China deletes leaked stats showing plunging birth rate for 2023
  • 8 days The European Union is exceptional in its political divide. Examples are apparent in Hungary, Slovakia, Sweden, Netherlands, Belarus, Ireland, etc.
  • 5 days Bad news for e-cars keeps coming

BP And Monroe Energy Lock Horns Over Oil Supply Contract

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

ADVERTISEMENT

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage



Leave a comment

Leave a comment

EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News