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- Oil and gas company Buru Energy (BRU) has completed lifting Ungani crude oil at Wyndham Port
- Petro-Diamond Singapore (PDS) completed the lift by taking over 76,000 barrels from a CGL storage tank on May 13
- Buru’s 50 per cent revenue share from the lifting was provisionally invoiced at approximately $1.2 million
- This is the final lifting of Buru’s contract with PDS, although Buru hopes to negotiate offtake contracts after it expires
- Buru Energy shares remain unchanged today, trading for nine cents per share
Oil and gas company Buru Energy (BRU) has completed lifting Ungani crude oil at Wyndham Port.
On May 13, 2020, Petro-Diamond Singapore (PDS) completed the lift by taking 76,817 barrels from CGL storage tank 10.
The price which Buru received for the lift was the realised average dated Brent oil price for the month. However, the buyer’s fixed marine transport discount (under its contract with PDS) was subtracted from the price.
Buru’s 50 per cent revenue share from the lifting was provisionally invoiced at approximately $1.2 million. This amount is subject to adjustments, related to the average dated Brent price for the month of May.
However, due to the perfect storm of the COVID-19 pandemic and OPEC+ trade war, oil prices have dropped to historic lows. However, the industry is starting to show early signs of recovery, with the Brent oil price currently rallying.
This latest lifting is the final lifting of Buru’s contract with PDS, which expires on June 30, 2020. However, through its joint venture with Roc Oil, Buru is exploring possibilities for contracts after June 2020.
In particular, the joint venture is in discussions with PDS and other globe crude traders, negotiating an offtake contract. Unfortunately, the potential of such a contract may face the impact of pandemic-related shipping constraints and the wounded oil market.
As such, the Buru and Roc Oil Joint Venture is considering various options for the near future. This includes the possibility of temporarily suspending production at Ungani, if necessary. The companies would be able to do so without material operational consequences, and at relatively low cost.
Buru Energy shares remain unchanged today, trading for nine cents per share at 11:29 am AEST.
