UPDATE: Platts Mulls Adding New Oil Fields To Brent Benchmark

Platts is looking into adding new oil fields to its Brent price assessment over the next couple of years to replace declining production from the current mix, which is used to set the cost of crude globally, the energy service's global director for markets and pricing said Monday.

The continuing downward trend in volumes of the four oil blends that make up North Sea benchmark Brent crude will necessitate the addition of new grades in coming years, said Jorge Montepeque, Platts global director, markets and pricing, speaking at the Platts London Oil Forum.

There is currently no urgency in this matter, but it makes sense to make these changes at a deliberate pace and to have the market aware that they may be coming, he said.

Brent, named for a North Sea oil field, is used as a benchmark to price more than half of the world's oil, and Platts' assessment is used to set the price of expiring Brent futures contracts. Brent's importance to the global oil market has grown in recent weeks as the New York Mercantile Exchange's oil futures contract, the other leading benchmark, has seen prices held down by a local buildup of supply in the U.S. Midwest.

Platts began adding new blends to its Brent price assessment in 2002, as production from the original Brent field fell to a point where a single company could buy enough cargoes to manipulate prices. The Brent crude benchmark currently comprises a blend of four North Sea crudes: Brent, Forties, Oseberg and Ekofisk.

The most likely addition in the near-term is Norwegian Statfjord crude, though in the more distant future and as reserves deplete further the company could even include grades from outside the North Sea, Montepeque said.

Platts is a unit of The McGraw-Hill Cos. (MHP).

-By Sarah Kent, Dow Jones Newswires; +44 20 7852 9376; sarah.kent@dowjones.com

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