Forties deescalator Platts

www.platts.com
] The Forties de-escalator
The McGraw Hill Companies
September 2008
Questions and answers
BACKGROUND TO THE FORTIES DE-ESCALATOR 3
THE FORTIES DE-ESCALATOR QUESTIONS AND ANSWERS 5

THE FORTIES DE-ESCALATOR QUESTIONS AND ANSWERS
2
In September 2008, Platts requested industry feedback on the
level of the de-escalator as applied to Forties cargoes and related
BFOE instruments in Platts North Sea assessments. At its
inception in July 2007, the de-escalator value stood at $0.40/b
for every 0.1% of sulfur over an established 0.6% wt level,
although this was reviewed and amended to $0.60/b in June,
2008 to reflect higher crude oil prices and a widening of the
spread between sweet and sour crude and products over the year
to date. Crude oil prices rose to over $147/b in July, 2008 but
subsequently fell to levels below $100/b the following
September. The value of light and middle distillates products
such as naphtha and middle distillates also rose – but then fell –
in relation to sulfur rich products such as fuel oil.
This document aims to address some of the questions and issues
related to the de-escalator issue.
On September 19, Platts published the following subscriber note:
SUBSCRIBER NOTE: Effective October 1, 2008, the sulfur de-
escalator to be applied in Forties cargoes and related instruments
in the Platts North Sea assessment process will be $0.40 per 0.1%
weight of sulfur over the 0.6 % wt standard, down 20 cts from
the current $0.60 de-escalator value. Platts conducted an open
review and consultation period with industry participants
following a sustained and significant fall in the price of crude oil
and a narrowing between sweet and sour crude market values in
the past few months. The de-escalator will be effective until the
end of 2008 unless market conditions change significantly in the
crude oil market that would necessitate an interim and open
review. Platts publishes a de-escalator assessment in its
publications, which is applied in all of its North Sea assessment
processes. Platts' guidelines for its sulfur de-escalator use three
significant figures for determination of sulfur-related payment.
The test reflecting this figure should be the ASTM-D2622
method. Forties cargoes and all related instruments, including
BFOE cash forwards, bid or offered through the Platts system
must adhere to this standard. For comments please contact
Joel_Hanley@Platts.com, elzbieta_rabalska@platts.com,
Jorge_Montepeque@platts.com and
methodologyissues@platts.com
Why did Platts change the de-escalator value back to the
original 2008 value of $0.40?
Platts implemented the sulfur de-escalator for Forties and related
BFOE instruments on July 2 2007, when Dated Brent/BFOE, the
European benchmark, stood at $72.895/b. The de-escalator value
for 2008 was reviewed in November 2007, when Dated
Brent/BFOE stood at $91.855/b. At that time Platts stated that
the value of $0.40/b for every 0.1% sulfur over the established
standard of 0.6% would remain for 2008 "unless there is a
significant and sustained event in the crude oil market that
would necessitate an interim and open review." The rise in global
oil markets from that date to June 2008 were significant, as
Dated Brent/BFOE hit a record high of $139.095/b on June 27.
Also the widening of the sweet/sour spread in both crude oil and
refined products showed around a 50% increase across many
sectors, with the spread between high sulfur fuel oil and both
naphtha and low sulfur diesel opening up significantly. This
wider spread gave rise to a re-evaluation of sulfur, potentially a
more significant factor in Forties over the North Sea summer
maintenance period when shut-ins at large sweet fields such as
Elgin/Franklin could lead to a sulfur reading of over 0.9%,
according to data from BP, the operator of Forties Blend.
Therefore, a 50% rise in the de-escalator from $0.40 to 0.60/b for
every 0.1% sulfur was seen as appropriate. Since that time, the
trend has been reversed, returning to a more similar price
environment as that seen in late 2007. As a result, a return to
the value of $0.40/b was appropriate.
Why did Platts not change the de-escalator value for 2008 in
the annual review of November 2007?
At the forum held at the Platts offices in London on November
2, Platts gave a presentation on the sulfur de-escalator used in
the assessment for Forties and related instruments as part of a
review meeting. Platts committed to this meeting when the de-
escalator was introduced in July 2007. As part of the review,
Platts analyzed the impact of a rising market in the value of
crude and whether this would or had caused a change in the
value of the sulfur de-escalator. However, after a period of review
involving a wide cross section of the industry, the $0.40 value
per 0.1% sulfur above the 0.6% sulfur threshold is still seen as a
fair value for participants in the Forties market. The original
presentation can be downloaded from platts.com at the
following web link:
http://platts.com/Oil/Resources/Presentations/index.xml
Will Platts be changing the testing method for sulfur detection
as used in the de-escalator?
The current testing method used in Platts’ assessments of Forties
and related instruments is ASTM 2622, and uses three significant
figures for determination of sulfur-related payment. The testing
method for Forties de-escalation remains under review and Platts
encourages market participants to continue in their research to
determine the most accurate method and procedures. Platts is
open to change on this issue and peer review is vital in this
process. Research seen by Platts so far has pointed to alternative
method IP 336 having a higher sensitivity to sulfur and giving
higher results. If IP 336 were to be adopted then it is likely that
the de-escalator value or base would have to be adjusted to offset
this higher bias. Otherwise, the Forties market would in effect
experience a net increase in the sulfur de-escalator payments.
Platts invites further research and open disclosure of the results.
This openness is critical for a peer review process.
Why did Platts require sulfur data from the Forties loadings
seen over the summer?
QUESTION AND ANSWER DOCUMENT ON FORTIES CRUDE OIL GUIDELINES

3
As part of the analysis of the Forties market behaviour and the
applicability of the sulfur de-escalator, Platts needed full
disclosure on sulfur content of Forties. In June BP-operated
Forties Pipeline System (FPS), the operator of Forties output,
issued a graph on its website implying that sulfur in Forties
would reach around 1.1% wt in the second week of August. After
this period of predicted high sulfur it was crucial to analyze the
cargoes loaded to gauge the correlation between the predicted
and the actual levels. Thanks to the data from market
participants the industry now has a better understanding of the
link between predictions and actual loadings. The highest sulfur
level seen on loadings between July and September was in
August, when a Forties cargo loaded with a sulfur level of
0.843%.
Where will the de-escalator rate be published?
From January 2, Platts has issued a databased number for the de-
escalator rate per 0.1% wt sulfur over the 0.6% standard. This is
available to all in the Crude Oil Marketwire and on Platts Global
Alert. This value will only change after industry consultation
and an announcement through regular Platts publications. This
indicator is likely to change only on an occasional basis after a
full review process. As a result, the indicator will be the same
amount on most days. As an example, this daily indicator will be
published in dollars per 0.1% as follows: “Sulfur de-escalator:
0.60”
BACKGROUND TO THE FORTIES DE-ESCALATOR
Platts published on July 2, 2007 the following subscriber note:
SUBSCRIBER NOTE: Platts held a forum in London on June 19,
2007 regarding its June 7 decision to assess Dated Brent and
related North Sea instruments with a quality threshold for
Forties crude oil in order to ensure Platts assessments continue to
reflect oil of normal qualities. Platts instituted the quality
standard of 37 degrees API and 0.60% sulfur in the wake of a
notice on June 7, 2007 by the BP- operated Forties Pipeline
System that there would be a substantial quality deterioration for
Forties cargoes loading in late July and August. During the forum
and subsequently in its publications, Platts invited comments by
June 29, 2007 on suggestions and proposals to address the
Forties quality issue and how to best maintain the consistency of
its assessments. Feedback was provided noting that operators and
producers faced difficulties in guaranteeing crude oil quality
ahead of its production. Having fully reviewed the issues and
having taken into account the varied feedback, Platts with
immediate effect will consider Forties in its assessments of Dated
Brent and related North Sea instruments with a quality de-
escalator applied for deliveries above the base standard of 0.60%
sulfur. Platts will consider in its assessments bids, offers and deals
where a de-escalator of 40 cents/barrel for every 0.10 per cent of
sulfur is specified. The de-escalator will be effective until the end
of 2007 unless there is a significant and sustained event in the
crude oil market that would necessitate an interim and open
review. Platts plans to initiate in September 2007 a period of
consultation and review with the industry to determine by early
October the de-escalator mechanism for the 2008 period. A
discussion of the de-escalator and the various proposals
submitted by the industry are outlined in a separate Q & A
document available on: www.platts.com.
The note aimed to clarify remaining issues regarding Platts
assessment process and substandard/off-spec Forties crude oil.
Platts Dated Brent and related North Sea assessments are used to
price over 60% of the world’s crude.
Clearly, it is of great importance that Platts assessment processes
are consistent and reflect standard grades of crude oil. While
some variability in crude streams is expected, Platts has aimed to
publish assessments that reflect Dated Brent and related North
Sea instruments which are of normal quality.
Platts monitored developments in the blending of sour crude
Buzzard as it was being mixed in light crude Forties in 2007.
Information provided directly by the operator indicated that
Forties blend would remain above the quality of Brent, easing
Platts’ concerns about the potential impact on the blend’s
quality. A quality downgrade, specifically where Forties
properties would materially fall below those of Brent, would
have resulted in Platts resetting its assessment mechanisms for
the North Sea.
Platts was also concerned over the lack of transparency in the
blend and the impact that maintenance of the light/sweet
Forties fields would have on the resulting blend. Market
participants in the Forties market indicated they had no access
to non-public information regarding the impact of the planned
and future maintenance plans on the quality of the blend,
because FPS maintained a separation from the trading entities in
the Forties market. Platts felt more information was required
since Forties is part of a global benchmark and transparency is a
key ingredient in properly functioning markets. The information
was released only a few days before the first affected loading
monthly program was issued. Some Forties cargoes in the July
program as well as most in August were revealed to have a large
rise in sulfur and a significant decline in gravity which
combined would have had a material impact in the price of
Forties and henceforth in Dated Brent. Off-spec material, clearly
would trade at a significant discount versus normal Forties grade.
To protect the integrity of its price assessments, Platts
immediately declared it would continue to use Forties in its
assessment processes but only if it met a quality guarantee of
minimum 37 degrees API and a maximum of 0.6% sulfur. This
would ensure continuity in the assessment process as grades that
would have had a material change in quality would not affect
the Platts assessments. Subsequently, several players suggested a
different approach that would allow Platts to still consider
Forties in its assessment process but without sellers having to
provide a guarantee of quality.
Many players felt the approach used in other markets such as
that for Russian Urals crude oil where there are quality de-
escalators to account for quality degradation should be explored.
This approach would enable Platts to maintain the continuity of
its assessment process. Platts held a forum and engaged with

4
many market participants to address these issues, explore
suggestions and analyze proposals. At all times, Platts goal is to
generate an accurate assessment based on long established
assessment processes and to ensure that there is continuity in
the assessment.
Following this extensive review, Platts made the announcement
in the subscriber note that it will consider Forties in the
assessment process in those cases where the seller includes a de-
escalator of 40 cts per 0.10% of sulfur above the 0.60% sulfur
mark. This value was reviewed in June 2008, as outlined above.
The following question and answer document addresses a
number of questions relating to the de-escalator concept. Platts
welcomes any additional questions and will update this Q & A
document as necessary. The enhancement to the Forties quality
guidelines is to be implemented from July 2, 2007. Platts
acknowledges that many North Sea traders suggested an
implementation date after the summer maintenance issue is over
and the quality problem have eased. Platts feels that the sulfur
de-escalator should be implemented when off spec quality
Forties is delivered and not when the quality has returned to
normal.
Why did Platts announce a quality de-escalator?
Platts on June 7th 2007 set in place a quality threshold of 37 API
minimum and 0.6% sulfur maximum for Forties Blend to be
considered in its North Sea assessments, due to public
information made available on that date by BP-operated FPS that
a substantial quality deterioration would occur on Forties crude
oil for cargoes loading in July and August. The quality parameter
was required because the higher proportion of Buzzard crude in
Forties Blend was anticipated to result in a substantial worsening
of the sulfur level in Forties Blend during the field maintenance
season. FPS estimated the cargoes could contain up to 0.95%
sulfur. The industry provided Platts with feedback regarding
difficulties on providing an absolute guarantee of the quality of
any crude oil ahead of the actual loading. FPS has specifications
over some contaminants for oil supplied to the pipeline but
none regarding gravity or sulfur. By putting in place a de-
escalator for sulfur, deliveries of oil exceeding the 0.60% level
quality parameter can still occur but the integrity of the price
assessment process is preserved. BP suggested a de-escalator at
the Platts forum on June 19th, 2007 although it proposed a date
of implementation that was after the dates when Forties quality
was expected to deteriorate. The aim of such de-escalators is to
compensate the buyer if the buyer receives oil that is below the
normal quality. That way, quality parameters are maintained,
assessments are consistent and suppliers would able to more
easily deliver crude oil through their supply chains.
How does the de-escalator work in practice?
Platts continues to consider Forties in its assessments, based on a
0.60% sulfur standard as per its subscriber note of June 7th, but
with a quality de-escalator applied beyond the 0.60% sulfur
standard. Platts will consider in its assessments bids, offers and
deals where a de-escalator of 40 cts/barrel for every 0.10 percent
of sulfur is specified. Under the de-escalator, the seller
compensates the buyer for oil delivered below the standard. An
illustrative sample compensation table for every 0.10 pct of
sulfur over 0.60% follows:
Sulfur 0.60% or less: No compensation to buyer
0.601% Seller pays 0.4 cts/barrel to buyer
0.61% Seller pays 4 cts/barrel to buyer
0.9% Seller pays $1.20/barrel to buyer
Where did the de-escalator proposal come from?
Platts considered a number of mechanisms for implementing a
quality parameter for oils that are part of the Brent/BFOE
complex. Quality escalators and de-escalators are widely used in
the oil industry when the quality of a grade of oil being
delivered is variable. For instance, many spot and term deals in
Urals crude use an escalator or de-escalator based on the API
gravity. BP articulated a proposal for the use of a de-escalator for
sulfur ahead of the discussion forum held in London on June 19.
Platts said at the forum that it would review the viability of
using such a de-escalator, and engaged with many industry
players regarding this issue. The BP proposal was one of a
number of suggestions from industry members about how to
implement a quality parameter. BP’s original proposal mooted a
de-escalator based on 30 cts per 0.1 percentage point of sulfur, to
be reviewed periodically by a third-party body from within the
industry. Subsequently, many refiners, equity producers and
others engaged in a quantification exercise of the de-escalator
proposal with Shell, in a separate notification to its trading
partners on June 29, suggesting it would consider a contractual
amendment to the BFOE contract.
How did Platts decide to implement a quality de-escalator for
Forties?
As with all its editorial decisions, the decision to adopt a de-
escalator on Forties was taken independently by Platts. Platts
welcomes the constructive and detailed feedback and suggestions
that it received from many quarters of the industry. Platts
considers and reviews the feedback and makes an independent
and impartial decision with the main goal of ensuring accuracy
of its assessments. Although a wide range of levels of de-escalator
was originally suggested by different companies, most of the
feedback from producers, refiners and other market participants
converged on a valuation of around 30-50 cts/bbl, which
coincided with the sweet/sour behaviour of other European
grades. Platts also considered a number of other variants of de-

5
escalator. Industry players suggested several types of escalator
including percentage escalators scaling with the outright price
(for example, 0.5% of the value of the oil per 0.1% of sulfur) and
variable rate escalators (for example, 50 cts/bbl between 0.6%
and 0.7%, then 30 cts/bbl between 0.7% and 0.8%) and other
such non-linear de-escalators. In the end, Platts felt that a simple
linear de-escalator was the best solution, particularly given that
the threshold of 0.6% sulfur is only likely to come into play on
Forties during periods of maintenance.
What other proposals did Platts receive from the industry?
Platts had a dialogue with many companies, ranging from field
operators to oil consumers. Most of the discussions focused on
finding a resolution to the issue of quality deterioration of
Forties and what to do in similar future situations with other
crude oil fields. Platts can categorize some of the proposals and
suggestions that it received from industry players as follows: 1)
Not to apply quality standards and abandon the concept of a
quality floor. 2) Remove Forties Blend from price formation on
Dated Brent, BFOE and related instruments 3) Apply a quality
floor for Forties and apply a de-escalator to get round the issue
of guaranteeing a specification ahead of loading, with the
following subsets a. to be applied promptly and to include
August cargoes b. to be applied only after August maintenance
was completed c. to be applied in some later time frame such as
3-6 months time Platts reviewed each suggestion independently
and concluded that the de-escalator was the optimal solution, as
it allows maximum participation in Dated Brent and BFOE price
determination while also putting in place a quality floor that
avoided any distortion in the value of the benchmark. Platts also
concluded that a quality corrective mechanism should be put in
place when it is needed not after its need has passed. As was
stated above, the use of a de-escalator for sulfur was the concept
that appeared to achieve the goal of allowing physical delivery
of oil without making an explicit physical quality guarantee,
while protecting the integrity of the Platts assessments by not
allowing delivery of sub-quality oil which would materially
affect the assessment process.
Why will Platts not apply a system in which there is no quality
floor? A few market participants suggested this course of action.
They felt that having no standards would reignite trade in cash
BFOE, whose liquidity dwindled after Platts announcement June
7 that it would introduce quality parameters for Forties. Platts
recognizes that a smoothly functioning forward market is
desirable to allow hedging and other trading strategies, but
ultimately, Platts’ goal, as a leading publisher of energy news and
pricing information, is to provide accurate and consistent
benchmarks and maintain the integrity of those price assessment
processes. Having no standards was not an option because, in
Platts opinion, the quality of Forties was likely to deteriorate
materially and this would have resulted in a material change in
the nature of the Brent assessment and its derivatives. Because
the seller has the choice of which grade to deliver under the
BFOE contract, he logically will deliver whichever grade is of
least value to him. If Forties of any quality were allowed to be
delivered, the BFOE benchmark would reflect the value of oil
that is worth less than Brent. The grades allowed by Platts for
alternative deliver against its dated Brent assessment were
selected because they are better in quality and therefore provide
a floating price cap in the event of a squeeze on Brent.
Why not simply remove Forties from the BFOE mechanism?
The removal of Forties from the BFOE benchmark was a step that
was seriously considered by Platts. Earlier in 2007, because of a
lack of transparency in the announcement of programs, Forties
cargoes loading in certain periods were not used in the
Brent/BFOE assessment process. Platts also identified the lack of
transparency of the impact of Buzzard injection on Forties
quality as a serious concern that might result in the removal of
Forties. It is desirable, however, for as much volume as possible
of suitable quality crude oil to be deliverable in the assessment
process for Dated Brent, BFOE and related derivatives because
North Sea volumes continue to decline. Platts decided that
keeping Forties with a working quality parameter would be a
better system as it would ensure greater participation in the price
discovery process. Platts remains open to the possibility that it
may remove Forties or any other grades, from the assessment
process if it identifies that these do not meet Platts high
standards of transparency, or if there are quality issues that prove
intractable. Simultaneously, Platts continues to engage in reviews
to find other suitable grades or delivery mechanisms.
Why was the idea of a scaling escalator rejected?
The introduction of a quality floor for Forties and applying a
scaling escalator to get round the issue of guaranteeing a
specification ahead of loading was seriously considered by Platts
as it would appear to have a number of advantages. The fact that
the de-escalator would increase with market value and decrease
with a fall in prices was welcomed by many market participants,
and was felt to be a mechanism to adjust as quality differentials
tend to expand or contract with the a rise or fall in the outright
price. But it was also noted that the correlation is not linear and
that cargoes in chains would have different deals at different
prices, and therefore the de-escalator amount would be different
for each transaction.
What are the advantages of a fixed price de-escalator?
A fixed price de-escalator is attractive because it is simple to
apply, and it can easily be passed down chains. Furthermore, the
objective is to set it for an appropriate defined period of time,
with any interim review only to be considered when significant
and sustained events have occurred. Any potential revision will
be made in an open and transparent way.
What does Platts say to the suggestion that putting a quality
floor in place for Forties represented a material change in
itself?
Platts does not accept this argument as it would be akin as
saying that in the gold market delivering gold with less than
0.999 purity should still be considered as being pure gold. The
information publicly available to the market and to the Platts

6
assessors on the quality impact of Buzzard on Forties was that
the crude would become slightly heavier and more sulfurous, but
that the quality would remain better than that of Brent. Some
people have suggested to Platts that there was an accepted risk
by those in the market that the quality might decline beyond
this, but if that was known, it was not at any point publicly
stated by the operators. The information publicly available did
not state until June 7, 2007 that there would be a significant and
material deterioration in the quality of the Forties Blend. Platts
stated in its IP Week forum in February and a subsequent open
forum at its Canary Wharf office that it would consider a quality
floor if Forties were to significantly decline in quality. The idea
of a quality floor was also reported in the press, including Platts.
In summary, Platts believes that the quality change mooted for
Forties in August was unexpected and not known to the market
at large, including some Forties producers.
Why did Platts put the de-escalator into place at such short
notice?
Some market participants suggested that Platts take steps to
address the quality issue only after the August maintenance. This
would have been like shutting the stable door after the horse
had bolted. As stated above, Platts believes that allowing the
assessments for Dated Brent, BFOE and related instruments to be
distorted by sub-quality material would have been a material
change in the content of the assessment. Platts felt a professional
and moral responsibility to act to avoid any such distortion,
because large volumes of oil around the world change hands
based on the dated Brent assessment and its derivatives. Whereas
there are only a handful of active players in the Brent market, a
multitude of buyers and sellers place their trust in Brent as a
reliable and consistent measure of market value, either in spot
and term physical deals, or derivatives markets such as swaps
and futures.
Will the 0.60% sulfur standard on Forties be reviewed?
The original de-escalator was effective until the end of 2007
unless there was a significant and sustained event in the crude
oil market that would necessitate an interim review. Platts held a
forum in November 2007 as a consultation with the industry to
determine the de-escalator mechanism for the 2008 period and
made an interim review in June 2008 after a sustained and
significant rise in oil prices. Platts recognizes that the overall
quality of North Sea crude including that of Brent may change
over time with the addition of new fields and the depletion of
existing fields, and Platts will be responsive to such changes in
the development of its benchmark assessments. But these are
longer term factors that are likely to emerge over the next
several years. They are not a pressing and imminent exigency
such as that represented by the Forties quality issue during
maintenance.
What about the chains – how do they work with a de-
escalator?
In most cases, the de-escalator does not come into play and
chains are therefore not affected. Under BFOE contracts, sellers
have the right to nominate a physical cargo of Brent, Forties,
Oseberg or Ekofisk at their option. The de-escalator only comes
into play if the seller chooses to nominate a Forties cargo which,
when loaded, had a sulfur of greater than 0.6%. If such a cargo
passed down the chains, the seller would compensate his next
buyer with the de-escalator amount, and this would be passed
down the chains to the final user of the oil. However, Platts
anticipates that such payments would be relatively infrequent as,
according to data received on Forties quality from operators,
deliveries of sub-quality Forties would only occur during periods
of maintenance when Buzzard forms a greater part of the Forties
Blend. Operators have told Platts that the periods of stress would
be 3-5 weeks of the year. Platts will continue to monitor the
quality of the blends and Platts expects timely disclosure ahead
of the loading programs.
How will Platts ensure the de-escalator is being enforced after
trade?
Platts will act as it does in other markets when it identifies that
deals are not performed under the terms stated. Platts is a
publisher with no enforcing remit, and its sole function is to
publish truthful information gathered from reliable and credible
market participants. If a participant were not to follow through
on its performance, such player would by definition become
non-reliable. Platts at all times is focused on its core competence
to publish accurate information, accurate assessments and
protect the integrity of its editorial processes.
Why is Platts setting the limit and not an independent third
party?
Platts is an independent third-party and never engages in a
transaction. Platts, obviously, recognizes that it or any third
party has the right to voice its own view on de-escalators. Platts
is responsible for the integrity of its daily price assessments and
would never take any action that might compromise its
independence and impartiality. Platts welcomes the role played
by industry bodies including membership organizations, and is
very open to dialogue or constructive engagement with such
bodies. But Platts will not depend on any such organization for
any decisions relating to the Platts assessments.
Will an escalator be introduced to compensate sellers when
Forties is better than the Platts standard?
No. Forties density typically ranges from 38-42 API degrees and
its sulfur is usually around 0.4-0.55% depending on the relative
volumes of streams fed into the blend. The inclusion of Forties,
Oseberg and more recently Ekofisk in the Brent price formation
was to introduce a floating cap to contain any upward squeezes
on Brent. The quality floor was introduced to avoid a downward
distortion that might have occurred if poorer quality oil than
Brent were allowed for delivery against BFOE contracts. The 37
API degrees and 0.6% sulfur parameter was introduced by Platts
to avoid that possibility of distortion. Effectively, it represents a
minimum standard, and Platts makes no claim that this is in
itself the average or typical Forties quality. By definition, the
choice to deliver Forties or any other grade into the BFOE
mechanism resides in the hands of the supplier.

7
Is Platts continuing to require a guarantee on Forties quality
and all related instruments in its assessments?
Although the introduction of a de-escalator means that a seller
will no longer have to guarantee the sulfur level of Forties, the
dated Brent assessment and related markets will continue to
reflect the standards applied to the quality of Forties. The Forties
grade will reflect an implied quality standard of 0.60% sulfur
because of the de-escalator mechanism. Also, Platts recognizes
that the 37 API degree standard is effectively moot so no
guarantee of density or de-escalator will be required at this time.
Will de-escalators be used in Brent, Oseberg and Ekofisk?
This is something Platts would consider if these grades of oil
suffered the same quality variability as Forties. Platts is not
considering such a step at present because these grades do not
currently face a wide variation in quality even during periods of
maintenance. But Platts will start and engagement process to
determine if newer standards are required. Platts will engage
with the industry to determine if there is a need to monitor acid
content or plans to mix other crude oils into existing streams. At
all times Platts believes that issues should be discussed frankly
and openly ahead of time to avoid issues.

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