U.S. export regulators are seeking more information from at least three would-be exporters of domestic condensate, including Marathon Oil, while half a dozen other firms have recently been cleared to sell the abundant ultra-light oil abroad, people familiar with the process told Reuters.
The latest queries from the Bureau of Industry and Security, or BIS, show that the door for exports is not yet open to all, despite last month's release of a document clarifying what oil can be exported, the administration's biggest step yet toward easing a decades-old ban on exports.
The questions add to unease among some oil producers about what exactly is permissible, and may temper expectations of a rapid rise in condensate exports.
The agency that oversees trade controls said in December it was processing "some" of the two dozen export requests that had been on hold since the summer. One firm - Royal DutchShell - confirmed it had been given the all-clear to sell lightly processed condensate abroad.
At least five other firms also got an all clear, according to three people involved in the process, who declined to identify the firms.
One of the companies that has not yet been given the green light is Marathon Oil Corp. , which received a list of questions seeking more details about its application from the BIS, according to a person familiar with its application, known as a CCAT or commodity classification request.
Marathon said it would not comment about whether the BIS has held up its CCAT request.
The additional questions sought information not covered in the guidance the bureau published at the end of December in the form of frequently asked questions to explain what kind of oil was generally allowed under the ban.
That guidance made clear, for the first time, what processing was required to transform oil from 'raw crude' - which has been restricted for four decades - into some form of intermediate product, which like gasoline or diesel is allowed.
The document was meant to provide clarity to the industry and encourage companies to "self-classify" - essentially move ahead and exports without checking with BIS to ensure the sale is legal.
A lobbyist said the guidelines provided some assurances that the administration was open to allowing certain kinds of oil exports but that many companies were still "leery" of pressing ahead without some sort of formal clearance.
Before granting that permission, the agency had previously sent questionnaires to as many as two dozen energy companies about their export plans in October.
BEYOND CONDENSATE
Some of the queries appear related to the nature of the oil involved, rather than the level of processing, potentially a sign that some companies are trying to test the limits of current export restrictions, another person working with would-be exporters told Reuters. It is unclear whether other varieties of crude would still be subject to restrictions if were processed in the same way.
So far, the companies that have secured export approval are likely to have production and product similar to Enterprise Products Partners and Pioneer Natural Resources, which were the first to say last summer that the BIS had endorsed their plans to export condensate after light processing through a distillation tower, sources said.
Some companies are expected to seek to export condensate that does not originate from the Eagle Ford patch in Texas, where condensate production is booming.
"The question is no longer how many additional classifications have been approved, but whether any vary from the scope of the Enterprise template," said Jacob Deck, a lawyer who represented Enterprise.
Other companies may be trying to test the limits of the export ban by asking the BIS if it can export lightly-processed oil that is not condensate.
"Some of the pending classification requests do not pertain to condensate per se, but do involve similarly basic processing of crude oil through a distillation tower," Jeffrey Orenstein, a lawyer with DC law firm Reed Smith, told Reuters.
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