TNK-BP has signed the first domestic oil products sale contract using a price formula mechanism on the off-exchange market. The price formula is based on quotes from the Platts oil agency, the Company’s press release said.
The first contract is for delivery of 5,000 tons of diesel to a retail company operating in central Russia. The price formula system guarantees that the buyer will receive the agreed volume at the market price.
“This year TNK-BP has become the first Russian oil company to use a price formula for diesel sales on the domestic market. We’ve succeeded in signing our first contract for future delivery at a price based on a Platts quotation. We hope that as exchange trading of oil products develops in Russia futures contracts will become more common thus creating a more liquid contracting system for future deliveries ”, said TNK-BP’s Vice President for Sales, Trading and Logistics Jonathan Kollek.
TNK-BP is the third biggest oil company in Russia and is equally owned by BP and the AAR Consortium (Alfa Group / Access Industries / Renova). TNK-BP also owns around 50% of Russian oil & gas company Slavneft. TNK-BP produces around 16% of Russia’s oil output (Including TNK-BP’s share in Slavneft). As o f 31 December 2009, the company’s total proven reserves under SEC rules without taking account of license cut-off amounted to 8.586bn boe.