The Abu Dhabi National Energy Company, or Taqa, has taken control of the delivery system of Europe's benchmark crude oil, Brent Blend. Taqa said it had replaced a unit of Royal Dutch Shell, which had operated the North Sea pipeline and processing system since the mid 1970s. "This is the latest step in our North Sea activity programme," said Leo Koot, the managing director of Taqa's UK subsidiary, Taqa Bratani. "Operating the Brent system is a serious undertaking."
Brent Blend crude oil became a household name thanks to its use by the industry as a benchmark for pricing crude oil from other fields, eventually becoming the reference price for about two thirds of the crude oil traded on the world's physical markets. It is also used in pricing Brent crude oil futures traded on the London-based Intercontinental Exchange (ICE). But the Brent oilfield, which Shell discovered in 1971 in waters between Scotland's Shetland Islands and the Norwegian coast, is nearly tapped out and now produces mainly gas. In its heyday in the 1980s, it pumped about 400,000 bpd of crude, as well as associated gas and gas liquids.
To make the benchmark more liquid, three other North Sea crude oil grades are now also used to calculate the daily market price for Brent Blend. The Brent System, which includes gas processing facilities and a 150-kilometre undersea pipeline, is jointly owned by 21 companies. It transports about 100,000 bpd of crude from about 20 North Sea oilfields, including Brent, to the Sullom Voe export terminal in the Shetland Islands, off the coast of Scotland. That accounts for about 8 per cent of UK offshore oil production, Taqa said.
Last year, Taqa paid US$631 million (Dh2.32bn) to acquire seven oilfields from Shell and Exxon Mobil, as major international oil companies shed mature assets in the North Sea. The acquisition also included a 16 per cent interest in the Brent System and a 24 per cent stake in the Sullom Voe terminal. The Brent field was not among the assets that Taqa acquired. Shell and Exxon are still the biggest equity partners in the Brent System, with interests of 25.2 per cent and 26.3 per cent respectively.
Mr Koot said Taqa had recruited experienced staff and installed "first-class" information technology and infrastructure to enable the company to advise and liaise with its Brent System partners. Taqa also owns gas producing assets in the Dutch North Sea and has said it is looking for acquisition opportunities in Norwegian waters. @Email:tcarlisle@thenational.ae