BP to export US crude to Canada, Shell seeks permit

Thu Oct 11, 2012 6:07pm EDT
 
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By David Sheppard and Chris Baltimore

NEW YORK/HOUSTON (Reuters) - Oil major BP Plc has secured U.S. government permission to ship U.S. crude oil to Canada, and Royal Dutch Shell has applied for an export license, as rising production in the world's top oil consumer upends global energy flows.

A surge in output from shale oil reserves in the Bakken of North Dakota and Eagle Ford of Texas has raised U.S. domestic production to the highest level since 1995, light, sweet crude that could fetch better prices on international markets. The United States still imports more than 8 million barrels per day, making it the world's biggest importer.

BP Plc received a crude export license this summer from the Bureau of Industry and Security, a branch of the US Commerce Department, to ship crude oil to Canada, a source familiar with the issue said on Thursday. BP has yet to export any crude oil on that license, the source said.

"We have applied to the Department of Commerce to export domestic U.S. crude oil," Shell spokeswoman Kayla Macke told Reuters, adding that as a global commodity, imports and exports would follow supply and demand.

Macke declined to comment on the likely export destinations or the volumes of crude involved.

A nearly century-old U.S. law requires companies to get a special license to export crude oil. Until recently, there has been no demand for overseas shipments, apart from a trickle of crude from Alaska that has been routinely exported.

The Financial Times first reported the news, saying Swiss-based trading firm Vitol applied for a license, citing people familiar with the matter.

"Other than routine movement between Canada and the United States, we have not been involved in any crude oil export requests," a Vitol spokesman said.   Continued...

 
A British Petroleum (BP) logo is seen at a petrol station near the Burj Khalifa in Dubai August 29, 2012. REUTERS/Jumana ElHeloueh