UPDATE 1-Taiwan Formosa buys Basra Lt, first Vasconia crude
SINGAPORE, March 17 (Reuters) - Taiwanese refiner Formosa Petrochemical has bought 12 million barrels of Iraqi Basra Light crude and its first Colombia Vasconia crude via tenders, trade sources said on Tuesday.
Royal Dutch Shell will deliver the Basra Light cargoes in six shipments between May and December, they said, at about 30 cents a barrel below the grade's official selling price (OSP) on a delivered basis.
The prices were very competitive when compared with a recent deal at parity to OSP for April delivery, traders said. An oversupply of crude has enabled the refiner to purchase cargoes months ahead at low prices.
Formosa also bought separately its first Vasconia crude cargo from European trader Gunvor at about $1.50 a barrel below Dubai quotes on a cost and freight (C&F) basis, the sources said. The 700,000-barrel cargo will be delivered to Formosa in May.
Formosa bought its first Oriente crude from Ecuador last year.
The Taiwanese company joins a growing group of Latin American crude buyers in Asia as they looked further west for cheaper oil. The arbitrage for Latin American grades to Asia had opened after U.S. crude futures fell to the lowest in more than a year against global benchmark Brent CL-LCO1=R. (Reporting by Florence Tan; Editing by Michael Perry and Gopakumar Warrier)
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