Shares of oil and gas explorer Pioneer Natural Resources Co. (PXD) are up more than 5 points in pre-market trading following a Wall Street Journal report that said the Obama administration has given Pioneer Natural Resources Co. and Enterprise Products Partners LP (EPD) permission to start exporting ultra-light oil to foreign buyers, thawing a nearly 40-year-old ban on oil exports.
The report said the shipments from both companies, which had been approved earlier this year and the amounts exported are likely to be small, could begin as soon as August. The Commerce Department issued a statement late Tuesday saying there had been “no change in policy on crude oil exports.”
Under current U.S. law, companies can export refined fuels such as gasoline and diesel, but cannot ship out oil itself, except in limited circumstances that require a special license. The Journal reported that the Commerce Department’s private ruling defines some ultralight oil as fuel once a small amount of processing has been done, making the oil eligible for sale outside the U.S. According to Brookings Institution estimates, as much as 700,000 barrels of ultralight oil per day could be exported starting next year.
“Eventually, the exemption could grow to a substantial portion of the three million barrels a day of oil that energy companies are pumping from shale,” the Journal said, citing industry experts.
Shares of Pioneer rose $5.32, or 2.40%, to $226.97 in Wednesday’s pre-market trading, extending their y/y and FY2014 rally to nearly 21% and 54%, respectively. Shares of Enterprise Products were up 64 cents, or less than 1%, to $76.85 on light volume.
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