Nick Snow
Washington Correspondent
WASHINGTON, DC, Apr. 5 -- The US Department of Energy rejected initial bids to supply the Strategic Petroleum Reserve with as much as 4 million additional bbl of oil. DOE's fossil energy office said the bids were too high. A second solicitation will occur in mid-April, it indicated on Apr. 4.
The solicitation was the first of a series to replace 11 million bbl sold from the reserve in fall 2005 after Hurricane Katrina damaged supply lines. The purchases would be the first for the SPR since 1994 and will be financed with the $584 million of proceeds from the emergency sale, DOE said.
It said that the SPR, which has a 727 million bbl capacity, currently has 689 million bbl of inventory. DOE said that it plans to stagger solicitations over several months to minimize market impacts and hopes to achieve a moderate fill rate of 100,000 b/d.
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