Guyana’s Liza crude will gain a formal pricing role in Europe from July 1 as Platts reshapes its European Sour Crude Index (ESCI) to better capture evolving Atlantic Basin trade flows and rising imports from Latin America, according to an S&P Global Energy report on May 18.
Guyana’s Liza crude to join Platts European index – S&P Global Energy | OilNOW
The ESCI is a pricing tool used to measure the value of medium to heavy, sulfuric crude oil delivered into Europe. It helps refiners and traders understand import prices and compare different crude grades.
“The revised basket reflects feedback from market participants that the European medium and sour crude markets have evolved to comprise higher volumes of longer-haul crudes from Latin American and Middle Eastern producers in addition to native sour crudes,” S&P said.
Under the new system, Liza will sit alongside other major global crude grades used in Europe, forming part of a revised basket that better matches how oil now flows into the region’s refineries.
Guyana crude blends capture bigger chunk of European market this year | OilNOW
Platts will also set a cost and freight (CFR) price for Liza crude into Rotterdam. This means the price will include the cost of shipping the oil to Rotterdam, one of Europe’s main import hubs.
It will now calculate the index using an equal share of the five crude grades, instead of giving more weight to North Sea supplies.
“In response to evolving trade flows in the European medium and sour crude markets, Platts will amend the index basket to reflect the following assessments: Johan Sverdrup CIF Rotterdam, Buzios CFR Rotterdam, Liza CFR Rotterdam, Kirkuk CFR Augusta KEBCO CIF Augusta,” the S&P Global article said.
As part of the update, Platts will also introduce net-forward pricing for Liza crude into Rotterdam, alongside Iraq’s Kirkuk into Augusta, using freight-adjusted calculations based on existing spot assessments and tanker route data.
“These net-forward calculations will utilize Platts existing Liza FOB Guyana, and Kirkuk FOB Ceyhan spot assessments in addition to the latest available Guyana -UKC Suezmax, and Ceyhan-Med Aframax assessments to derive a CFR Rotterdam and CFR Augusta value, respectively. The publication of these assessments and the ESCI will follow the London publication calendar. Liza CFR Rotterdam will be calculated using the latest available published assessments for Liza FOB Guyana and Guyana-UKC Suezmax, which follow the US publication schedule,” S&P added.
Platts announced the commencement of daily assessments for Guyana’s Liza crude in February 2021, while the grade debuted on the Platts Market-on-Close process in 2024.
Liza crude is one of four grades produced offshore Guyana. Production from the Liza 1 project has reached peaks of 160,000 barrels per day (b/d) and has averaged around 130,000 b/d in recent months, with Europe remaining a key destination for exports.
ExxonMobil operates the block with a 45% stake, alongside Chevron (through Hess) at 30% and CNOOC Limited at 25%.
