Mining giant BHP Billiton has revealed plans to export ultra-light oil from the US without getting formal approval from Washington, testing the limits of the 40-year ban imposed on foreign sales.
According to the article on The Wall Street Journal, BHP has scrutinised all the applicable laws and will go ahead with exports of 650,000 barrels of ultralight sweet oil from Texas to undisclosed buyers. The deal is reportedly worth about $50 million.
“BHP Billiton continuously examines opportunities to optimize its commercial options in full compliance with all applicable laws and regulations,” the company said in an e-mailed statement.
“We plan to export processed condensate that has been fractionated in distillation towers at our Eagle Ford operations in south Texas.”
The company’s risky move just might go unnoticed as Washington is currently wound up in the post-election haze.
Two Texas oil companies were given permission by the Commerce Department to export the condensate without first sending it through the traditional refining process.
It was soon understood that the Obama administration intends to lift the ban; however, it was not the case.
With the rulings given to Enterprise Product Partners and Pioneer Natural Resources, the bureau affirmed that condensate qualifies as a petroleum product, making it eligible for export, after it has been distilled and separated into distinct components, reports Fuel Fix.
Since the orders are designed to provide legal assurance, there’s nothing stopping copycats from selling their product overseas as well.
“The announcement is not surprising and is fully consistent with the framework of the export regulations, which contemplate self-classification by exporters,” said Ted Kassinger, a partner at law firm O’Melveny & Myers, who represented Enterprise before the bureau. “I expect others having similar processes will follow the same path.”
The Obama Administration has been divided over whether to allow US oil exports, but big oil companies, like Exxon Mobil Corp, have called for an end to the ban, saying that overseas sales would create US jobs and improve the balance of trade.