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Bentley offtake deal amended
Posted 12.06.2012 10:39:18 av John Bradbury
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Bentley heavy oil field operator Xcite Energy has amended its oil offtake agreement with BP for the forthcoming development.

Although an incentive fee to be paid by Xcite to BP for Bentley heavy crude will be related to the prevailing dated Brent crude price, a further element to the fee has been added.

Xcite said today that for the first three years of the project, it will also pay BP to deliver diluent products to be blended with the Bentley crude, in order to maximise its value.

BP Oil International (BPOI) has also agreed to provide Xcite with US $5 million of finance for the phase 1B development of Bentley – as part of  a reserves-based lending facility being negotiated with banks.

Furthermore BPOiI has also agreed to provide further funding to reduce Xcite's working capital requirements for the costs of the diluent. This could be worth between $20 m and $40 m Xcite says, depending on Bentley field production rates and blending requirements.

BP agreed with Xcite back in January to provide offtake and marketing services for Bentley crude, in return for an incentive-based fee per barrel.

“We are very pleased with this further endorsement and increased support from BP, with the amendment to the marketing and offtake agreement providing significant additional financing for Phase 1B of the Bentley field development programme, through a combination of reserves based lending and flexible working capital support,” noted Xcite chief financial officer Rupert Cole.
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