Joel Julien

joel.julien@guardian.co.tt

State-owned Her­itage Pe­tro­le­um Com­pa­ny Ltd has re­sumed ex­port of its crude oil af­ter pre­vi­ous­ly opt­ing to store its oil rather than sell it at record low prices.

“We have re­sumed the ex­por­ta­tion of crude and have at­tract­ed quite favourable in­ter­est and prices,” Her­itage’s chair­man Michael Quam­i­na told Guardian Me­dia yes­ter­day.

In April, fol­low­ing a pre­cip­i­tous fall in crude prices, Her­itage de­cid­ed it was bet­ter to store its oil in­stead of sell­ing it at a loss.

At that time oil fu­tures crashed and crude was sell­ing at US$13 a bar­rel, the low­est in more than two decades.

It costs Her­itage US$25 to pro­duce a bar­rel of oil ac­cord­ing to En­er­gy Min­is­ter Franklin Khan has pre­vi­ous­ly said.

Both the Brent and West Texas In­ter­me­di­ate bench­marks yes­ter­day rose to their high­est since March.

Brent trad­ed at over US$40 a bar­rel while WTI trad­ed at over US$38.

Quam­i­na said Her­itage en­tered in­to con­tracts last month and start­ed ex­port­ing ear­li­er this month.

Oil prices crashed ear­li­er this year as de­mand plum­met­ed be­cause of the slow­down of eco­nom­ic ac­tiv­i­ty due to COVID-19.

“As per our 2020 plan, Her­itage grew pro­duc­tion to ap­prox­i­mate­ly 41,000 bar­rels of oil per day as we com­plet­ed workovers and in­stalled gas lift on off­shore wells. Sur­face in­fra­struc­tur­al ac­tiv­i­ty in­clud­ing pipeline re­pair and re­place­ment of mo­tors added to pro­duc­tion vol­umes as well,” Her­itage stat­ed in a re­lease on April 20.

“This means that Her­itage now pro­duces ap­prox­i­mate­ly 1.2 mil­lion bar­rels of oil per month. As the oil price is ex­pect­ed to be in the low teens in this quar­ter, we are purs­ing a strat­e­gy of stor­age of oil pro­duc­tion which will be sold as the oil mar­ket im­proves.

“At present, Her­itage’s stor­age ca­pac­i­ty is ap­prox­i­mate­ly 3.5 mil­lion bar­rels which will al­low the com­pa­ny to store ap­prox­i­mate­ly 2.5 months of pro­duc­tion as some stor­age is al­so need­ed for set­tling and treat­ing of the pro­duc­tion to at­tain the cor­rect saleable qual­i­ty,” it stat­ed.