US Issues First Guidance on Petroleum Exports

The Obama administration released on Tuesday a long-awaited explanation of what petroleum is allowed to be shipped under the contentious 40-year ban on exports of most domestic crude.

The Bureau of Industry and Security (BIS) released the guidance in the form of frequently asked questions, or FAQ, in the first effort by the administration to clarify an issue that has caused confusion and consternation in energy markets for more than a year.

The BIS guidance said energy companies must use distillation towers to produce lightly treated oil called condensate to export it and not simply treat it with flash drums that have so- called heater treaters.

Uncertainty about what kind of petroleum can be shipped abroad has frustrated oil market players since BIS, an office of the Commerce Department, quietly gave permission in 2013 to a small company, Peaker Energy, to export condensate.

The guidance has been in the works for nearly a year. Last spring BIS gave two other companies, Pioneer Natural Resources and Enterprise Products Partners, permission in private letters to export treated condensate.

The guidance can be seen here: http://www.bis.doc.gov/index.php/policy-guidance/faqs

(Reporting by Timothy Gardner; Editing by Jessica Resnick-Ault and Bill Trott)