DUBAI - Abu Dhabi National Oil Company (ADNOC) will remove all destination restrictions for all its crude grades ahead of launching its Murban futures contract, a senior ADNOC executive said on Wednesday.
Khaled Salmeen, who heads ADNOC's downstream, marketing and trading department, also said that ADNOC has signed initial deals with Rongsheng Petrochemicals and Unipec to explore the use of Murban futures with Chinese end users.
"This is to create more freely traded commodity that can be traded on the global markets," Salmeen said.
"We believe that the removal of the restrictions will bring additional value to our customers and at the same time to ADNOC."
Apart from Murban, ADNOC's other crudes are Das, Upper Zakum and Umm Lulu grades.
Intercontinental Exchange Inc ICE.N will launch ICE Futures Abu Dhabi (IFAD) and trade in Murban futures contracts this month.
ADNOC had said its flagship Murban crude would be traded on a new local exchange, IFAD, that would be owned by Abu Dhabi, several oil firms and ICE, home to trade in Brent crude.
The new contract will create an alternative benchmark to the most commonly used Middle East standard, the Dubai/Oman benchmarks operated by S&P Global Platts and the Dubai Mercantile Exchange (DME).
Companies that agreed to be partners in the exchange include BP, Total, Inpex, Vitol, Shell, Petrochina, South Korea's GS Caltex, Japan's JXTG and Thailand's PTT.
Output of Murban light crude is about 1.6 million to 1.7 million barrels per day (bpd).
The UAE, the third biggest oil producer in the Organization of the Petroleum Exporting Countries (OPEC) behind Saudi Arabia and Iraq, pumps about 2.5 million to 3 million bpd, mostly produced by ADNOC.
Asked about the impact of current OPEC output cuts on trading Murban, Salmeen said that the UAE is adhering to OPEC's reduction pact, and ADNOC has enough storage to ensure uninterrupted supply of Murban despite production restrictions.
(Reporting by Rania El Gamal; editing by Louise Heavens and Jason Neely) ((Rania.email@example.com))