(Adds background)
By Julia Payne
LONDON, Dec 6 (Reuters) - BP supports the addition of
U.S. oil crude grade WTI Midland to global dated Brent,
suggesting the removal in the medium-term of Brent and Forties
grades from the benchmark as flows have evaporated, according to
a document seen by Reuters.
Dated Brent, the S&P Global Platts benchmark set up over 30
years ago, is vital to the global oil system as it is used to
price around 60% of the 100 million barrels a day (bpd) crude
oil trade.
BP also said in the document that it did not support the
idea of adding Norway's huge Johan Sverdrup field to dated Brent
because it was a more sour grade of crude. Platts had said in
July that industry opinion was focused on the possible addition
of WTI or Sverdrup.
Its comments echoed those made in September by oil trader
Vitol.
Oil pricing agency S&P Global Platts and Intercontinental
Exchange (ICE), the home of Brent futures trading, have
held discussions on the benchmark, after an earlier Platts
proposal to include WTI was delayed because of industry
pressure.
"BP strongly believes that the inclusion of WTI Midland,
executed correctly, is the best solution for enhancing
liquidity, retaining Brent as a well-supplied and trusted light,
sweet benchmark," it said.
BP did not immediately reply to a request for comment.
Dated Brent is currently based on five North Sea crudes -
Forties, Brent, Oseberg, Ekofisk and Troll - but those supplies
are in long-term decline.
"BP also believes that in the medium-term Forties and Brent
will need to be removed from the benchmark as their values
become increasingly difficult to assess due to their reducing
volumes," according to the document.
BP discovered the Forties field in 1970 and Royal Dutch
Shell Brent one year later, together laying the
cornerstones of North Sea oil production for decades to come.
A lot of the infrastructure around the original Brent
oilfield is now being decommissioned. Production at the Forties
field has dwindled to about 20,000 bpd, government data shows.
But other fields have been added to boost the two streams over
the years.
Platts had said in February it would add WTI Midland and
change the basis to a delivered one or CIF, where cargoes
include insurance and freight costs, rather than free on board.
But in March it said it had deferred the move due to industry
pressure.
A Platts consultation on the issue ended on September 30.
Platts said it had no comment on the document.
"We respect the right of all market participants to express
their views publicly, as was the case with BP today," it said.
Reuters competes with Platts in the provision of news and
pricing information about the oil market.
(Reporting by Julia Payne; Writing Shadia Nasralla and Alex
Lawler; Editing by Louise Heavens and Emelia Sithole-Matarise)