Malaysia Petronas wants to ditch Brent benchmark - sources
* Petronas moots idea of platform to trade basket of crudes
* New Asia crude price marker aim at reflecting fundamentals in region
By Florence Tan and Jessica Jaganathan
SINGAPORE, Sept 10 (Reuters) - Malaysia's state energy firm Petronas is considering setting up a new mechanism to price oil produced in the Asia-Pacific that could better reflect demand and supply in the region, sources familiar with the matter said on Tuesday.
The plan comes two years after the second largest oil producer in Southeast Asia dropped a volatile Asian price marker for dated Brent pricing, a move that also prompted Vietnam and Brunei to change their benchmark.
Plans remained sketchy although the one source said that the price could be determined through trades of a variety of Asian crude on a trading platform.
"They are looking to set up a crude basket, one that can be traded using a platform," the source said.
Petronas has mooted the idea of a new price marker to other producers in the Asia Pacific as well as refiners and traders, the sources said on the sidelines of a major oil gathering in Singapore.
"It's more to reflect regional supply and demand more accurately," one of the sources said. "Dated Brent sometimes can be detached from regional market."
Dated Brent is underpinned by a dwindling pool of four North Sea crudes - Brent, Forties, Oseberg and Ekofisk (BFOE) and often spikes whenever the main crude stream Forties suffer an outage. The marker weakens whenever demand falls in Europe such as during refinery maintenance seasons.
"They want to move away from dated Brent pricing as they feel it doesn't accurately reflect the quality of their crudes," a source with an Asian oil firm involved in discussions with Petronas said. Brent has a higher sulphur content than most Malaysian grades.
Petronas' renewed interest in a new crude marker could also stem from a potential rise in its output as its new oil terminal in Sabah starts operation later this year, a third source said.
A source from one of the regional oil producers said they were still waiting for more details from Petronas on the pricing mechanism.
The Indonesia Crude Price (ICP) remains the only regional marker after Petronas dropped the Asia Petroleum Price Index (APPI) in 2011, two years after Australian producers moved to dated Brent.
Asian crude markers suffer from low liquidity due to production decline at mature fields, with prices frequently diverging from global benchmarks.
The move to the Brent benchmark at the time was to boost transparency by putting Asian crude on a common platform with growing imports of rival Brent-linked sweet grades from the Atlantic Basin, Central Asia and Latin America.
But Brent is still viewed as a European benchmark for oil produced several thousand miles away from Asia.
Buyers and producers remained cautious as it may be too soon to move to a new benchmark.
"It'll be an uphill climb because so many other people also want to do their own benchmarks," the first source said.
In China, the Shanghai Futures Exchange has announced plans to launch crude oil futures while Russia also nursed the ambition of making its ESPO crude the Asia benchmark. (Reporting by Jessica Jaganathan and Florence Tan, editing by William Hardy)
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