DOE to resume purchases for SPR in wake of crude oil price plunge

The US Department of Energy plans to take advantage of the recent crude oil price decline and resume filling the Strategic Petroleum Reserve, it announced on Jan. 2.

It said that it issued a solicitation to buy approximately 12 million bbl of crude to replenish supplies which were sold following Hurricanes Katrina and Rita in 2005. Congress overwhelmingly passed a law ordering DOE to suspend SPR purchases early last summer after prices broke the $100/bbl barrier. The ban expired on Dec. 31.

DOE said that it also plans to seek repayments from refiners for emergency oil it released from the SPR following Hurricanes Gustav and Ike in 2008, to deliver deferred royalty-in-kind oil, and to solicit new RIK deliveries this spring. The actions are required under the 2005 Energy Policy Act, it said.

It said that planned acquisitions during 2009 will bring the SPR back to its 727 million bbl storage capacity and provide the United States with approximately 70 days of net import protection.

Contact Nick Snow at nicks@pennwell.com

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