| WASHINGTON, July 14
WASHINGTON, July 14 The U.S. Commerce Department
will likely approve a new round of permits to export a lightly
processed form of crude oil, but it is unlikely that there will
be an avalanche of barrels that can be exported, a lawyer
representing oil companies said.
Jacob Dweck, a partner at law firm Sutherland, Asbill &
Brennan, who represented Enterprise Product Partners LP
in its successful application to export light oil known as
condensate that was made public last month, said he represents
other companies that have applied for a license. He said he
could not disclose the details of their requests.
Enterprise wrote a letter to the Commerce Department's
Bureau of Industry and Security (BIS) in February to clarify
whether condensates they produced in Texas can be exported if
they undergo minimal processing, and received a decision from
the agency a month later, Dweck said. Pioneer Natural Resources
also got a ruling allowing it to export minimally
Enterprise and Pioneer were among the first oil firms to ask
BIS for the clarification, but others have made similar
If other companies with similar products, access to
infrastructure and export recipients file a similar
clarification request, they are likely to get a green light from
the BIS, Dweck said.
"If you are far off the parameters of the ruling you are
better off requesting on your own," he told reporters on the
sidelines of a conference by the Energy Information
This will likely limit the amount of condensate that can be
exported after light distillation.
"We are not going to see an avalanche of processed
condensate being exported out of this country. It is going to be
an evolutionary process and it's going to be limited by
production, logistics and markets abroad," he said.
For example, the Utica shale in the northeastern U.S. has
condensates, but they face different transportation issues,
which may make them more difficult to export, he said.
Its distance from export ports means that the condensate
could potentially be intermixed with other domestic crude,
making it ineligible for export.
In Eagle Ford, which is closer to export terminals, the
situation is different.
Dweck said there was an overreaction to the Enterprise
decision, with people rushing to say that the BIS decision
marked a major change in the way the administration views crude
"I don't think the rulings were intended to be a 90-degree
turn in the Obama administration's ban on the export of crude
oil. I think the reaction was overblown," he said.
He said estimates point to a volume of around 1.2 million
barrels of lease condensate, with up to 1.8 million by the end
of the decade.
(Reporting By Valerie Volcovici; editing by Jessica
Resnick-Ault, Bernard Orr)