WTI $60.77 -66c, Brent $65.11 -59c, Diff $4.34 +7c, NG $2.82 -7c
Oil price
Another quiet day in blog land as the oil price drifts but the only one company report is incredibly significant for Amerisur and its shareholders.
The oil price fell modestly yesterday, it might have been more as most of the news in the market was bearish. The Saudis have made it clear that they can and will increase production above current levels ‘to meet strong demand’ which is interesting on both supply and demand levels. Just to go back to an old point of mine, in the summer months in Saudi, post Arab Spring as it were, the amount of oil used domestically has risen inexorably in recent years so whilst production may rise, exports don't automatically increase in tandem.
The IEA raised their demand forecasts but also their supply figures so not much to read into those stats and with the rally in the dollar the upside for oil was very limited.
Amerisur Resources
An Ecuador-Colombia interconnector update from Amerisur this morning and very good news it is too. An agreement has been signed with PETROAMAZONAS EP, operator of the pipeline system for the construction and use of the pipeline from the Ecuadorian border to the point of connection with the RODA gathering system for Amerisur's crude oil. Under the agreement the minimum volume commitment by PA is 5,000 b/d and the tariff is US $1.09 per barrel.
Amerisur has received a number of offers for the onward transport and sale of the crude oil and is evaluating them at present. Construction work on the pipeline system as well as the central processing station will be underway imminently. In Colombia the modification of the environmental licence at Platanillo has already been approved.
There should be no underestimating quite how significant this step is for Amerisur as it is a joint international project involving two nations and at times is ‘incredibly complicated to make reality’ as the Chairman noted. For Amerisur it brings forward the delivery of its crude through the interconnector and the cost savings are substantial. Just to get final visibility of the project is testament to the hard work of the team at the company from the bottom to the top and also the support of the Presidents of both Ecuador and Colombia whom I understand have been committed to the process. The interconnector is expected to be in…
