By Sherry Su, Olivia Konotey-Ahulu and Alex Longley on 10/31/2019

LONDON (Bloomberg) – A cargo of contaminated Russian oil was sold at a discount of more than $25/bbl to benchmark crude prices, six months after the consignment first got loaded onto a tanker.

The 720,000 bbl shipment, currently being stored in Rotterdam, was sold by the trading arm of Total SA as part of a tender, according to people with knowledge of the matter. Some of the oil has 39 parts per million of organic chloride — a chemical that can damage refineries and equipment — far beyond the single-digit levels that would be considered normal.

Russia’s unprecedented oil-contamination crisis began in April but it’s proven tricky and slow for the industry to absorb the supplies. The nation’s oil output was below its OPEC+ production target in the months that followed. Since then, cargoes have either been put into storage, stranded on oil tankers or sold at deep discounts.

“There’s a wave of factors that doesn’t make this crude very attractive to anyone unless it’s heavily discounted,” said Christopher Haines, an analyst at Energy Aspects Ltd. in London. “There’s just such a huge risk of taking that crude oil because if you blend it inconsistently you’ll end up having refinery problems.”

Pricey Storage. The market’s current price structure, known as backwardation, makes it expensive to store the crude, he said.

When the crisis was at its worst, some European refineries were forced to cut processing rates or even halt, prompting governments to tap emergency oil reserves.

In August, BP Plc failed to sell some of the contaminated Urals it inadvertently acquired during the crisis. That cargo had 29 parts per million of organic chloride.

There are still a handful of other shipments in limbo. At least two Aframax-class tankers, which usually carry about 700,000 bbl of Russian oil each, are yet to discharge the contaminated supplies. One is near Turkey and another is sailing to the Middle East, according to ship-tracking data compiled by Bloomberg.

“It’s more about minimizing their losses at the moment,” Alex Kavouris, a senior oil analyst at Facts Global Energy, said of the Total sale. “They’ve been trying to sell contaminated oil for how long now? It’s been sitting in storage, or in floating storage, and no one has been interested so maybe $25 is a good enough discount for both parties.”

https://www.worldoil.com/news/2019/10/31/total-finally-offloads-tainted-russian-oil-shipment

The oil was contaminated with organic chlorides, compounds used in the industry to boost extraction from oilfields by cleaning oil wells and accelerating the flow of crude.

The compounds must be removed before oil enters pipelines as they can destroy refining equipment or, at high temperatures, create the poisonous gas chlorine.

Tests by Belarus on oil from Druzhba showed organic chloride levels of 150-330 parts per million (ppm) between April 19 and 22, according to Gomeltransneft documents seen by Reuters, well above the maximum 10 ppm allowed by Transneft.

https://www.reuters.com/article/us-russia-oil-insight/how-russia-contaminated-27-billion-of-oil-exports-to-europe-idUSKCN1S61YM

The ‘hydraulic fracturing’ for gas and oil is poisoning our groundwater and aquifers with known carcinogens and other regulated pollutants (keeping in mind that it is only in the 21st century that chemicals have been incorporated into fracking operations.)

Opposition has come up spontaneously everywhere it has been tried.

I’ve had four Benson wells (5000 feet) drilled on my property, one on the week before Christmas when it was raining.  I’ve seen shale wells and been on the tours.  I’ve talked to people who have had shale wells done to them.  As the lady used to say on radio before you were born,  ” ‘Taint the same, McGee.”

this is ridiculous, it’s stupid. it’s like every day i find some new way monetary profit is killing people. it’s the 21st century, folks. can we please back a clean energy source already?