I live in Vancouver B.C. Canada, right now there are a lot of oil tankers anchored in our harbour that have been rented to store oil by traders to be sold at a later date because of the contango that is now in the oil market. Contango means you can sell oil in the future for a higher price then it is currently selling for.
HRT is making a wise move to store their production in the company's FPSO vessel. This a much better thing to do then to stop production. If they did that they would have to let go all of their production workers, but still have to have maintenance personnel, therefore not eliminating all of their costs in the Polvo field. Also when the price of oil rises to a more normal level, they could be faced with problems finding production workers.
In the past when traders have leased oil tankers during times of weak oil prices for the purpose of storing oil that has been a bullish sign for oil.
HRT is fortunate to have such a vessel that can store 1 million barrels, putting it to very good use, enabling it to sell the stored oil at a higher price in the future. Oil companies are suffering greatly from the current low oil price and would love to have such a storage capacity.
