US solicits bids to fill strategic reserve with Gulf of Mexico royalty oil

The US Minerals Management Service has begun soliciting bids from prequalified companies to fill the Strategic Petroleum Reserve with federal royalty oil from the Gulf of Mexico. Rather than purchase oil on the world market, US officials plan to collect 22 million bbl from April 2002 through April 2003 by dramatically expanding MMS's royalty-in-kind (RIK) program.President George W. Bush announced the program last November. MMS currently takes royalties of 100,000 b/d oil in kind, rather than in cash. About half of that is sold to small refiners (OGJ Online, Nov. 13, 2001).Industry has sought to expand RIK to all federal leases, saying it is a more equitable way of judging what the tr...

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