Exploration & Production

BP faults Monroe

BP has accused Monroe Energy of wrongfully terminating a crude supply contract in 2016, costing the oil major at least $59 million in damages, according to a federal court filing.

BP said in the filing that Monroe Energy, a subsidiary of Delta Air Lines, terminated the contract after misinterpreting a provision regarding the blending of crude oils.

BP declined to comment further on the case and Monroe could not be immediately reached. Monroe has yet to respond to the allegations in court.

The dispute with Monroe marks at least the second time in the past two years that BP has been accused by a refiner of supplying lesser-grade crudes. NARL Refining is embroiled in an arbitration dispute with BP that involves allegations that the oil major was providing crude oil at the company’s Come-By-Chance refinery in Newfoundland, Canada, that helped BP’s profits but hurt the refinery’s equipment.

Monroe Energy inked a three-year contract with BP in August 2014 to supply the company’s 185,000 barrel-per-day refinery outside Philadelphia with crude oil from the Eagle Ford or Bakken shale fields, according to the lawsuit filed in US District Court in Southern New York.

Monroe agreed to pay $8.35 above the US benchmark price for Eagle Ford and $7.35 above the US benchmark for Bakken deliveries, according to the lawsuit.