Hamm seeks new home for Bakken crude

OREANDA-NEWS. May 30, 2016. The main job of Continental Resources chief executive Harold Hamm yesterday was to introduce an energy policy speech by presumptive Republican presidential nominee Donald Trump. But he managed to make a little news of his own.

Hamm told a North Dakota audience that he had just returned from South Korea where he was negotiating a deal to sell Bakken crude — a move that would have been unfathomable before last December when Congress and President Barack Obama ended four decades of oil export restrictions.

"I just got back from South Korea to arrange a deal to deliver oil from the Bakken to South Korea," Hamm said."And we are going to be able to do that. We are going to have Bakken oil going to South Korea."

While it is not clear if a deal has been finalized, Hamm's statement appeared to be news to his own public relations team. A company spokeswoman yesterday said she had not spoken with Hamm since his return from Asia and would not have anything to add until next week.

Continental is not new to Asia, as it already partners with South Korea's SK Group on gas production in Oklahoma. SK operates the 870,000 b/d refinery in its home country, although it is not immediately clear if it is the trade partner Hamm mentioned at the Trump speech.

Logistics are a hurdle. There are no plans to span the Rocky Mountains with a westbound crude pipeline, so the only two options are rail to the Pacific coast or transport to the US Gulf coast paired with a long voyage.

While most of the Pacific northwest crude-by-rail unloading terminals are run by refiners that do not offer merchant services, Global Partners' facility at Clatskanie, Oregon, does and has ready access to the Pacific.

US crude-by-rail movements have plummeted as onshore prices have somewhat caught up with international prices, making movements to the coasts — much less beyond — uneconomic in recent months. But South Korea might be a special case, because it offers refiners special incentives to import crude from sources other than in the Middle East in an effort to diversify its crude slate.