DOE makes first direct oil purchases for SPR since 1994
The US Department of Energy awarded contracts on Jan. 16 to purchase nearly 10.7 million bbl of oil for the Strategic Petroleum Reserve.
Nick Snow
Washington Editor
WASHINGTON, DC, Jan. 21 -- The US Department of Energy awarded contracts on Jan. 16 to purchase nearly 10.7 million bbl of oil for the Strategic Petroleum Reserve. The awards were the first direct purchases of crude for the reserve since 1994, it said.
DOE said it awarded the contracts to Shell Trading Co. and to Vitol Inc. to deliver oil to the SPR from February to April. It said that it used revenues from the emergency sale of crude from the reserve following Hurricane Katrina in 2005 to pay for the purchase.
DOE also announced contracts using the royalty-in-kind transfer program with the US Department of the Interior to Shell Trading and Glencore Ltd. for 26,000 b/d of oil.
These awards will result in the addition of nearly 6.16 million bbl of oil to the SPR's inventory from May 2009 through January 2010, DOE said.
It said both sets of awards resulted from separate contract solicitations on Jan. 2. DOE said it decided to solicit the oil following sharp price declines during second-half 2008, which made the purchases more economically favorable.
Contact Nick Snow at nicks@pennwell.com.
