EXPORT OF CALIFORNIA HEAVY CRUDES APPROVED

The U.S. Department of Commerce has granted the first license to export surplus California heavy crude. The license was granted Dec. 6 and will be administered by Berry Petroleum Co., Taft, Calif., and Eastex Energy Inc., Houston. It allows export of 25,000 b/d of heavy crude produced by independents, representing about 1% of the state's total use.

Dec. 16, 1991

2 min read

The U.S. Department of Commerce has granted the first license to export surplus California heavy crude.

The license was granted Dec. 6 and will be administered by Berry Petroleum Co., Taft, Calif., and Eastex Energy Inc., Houston. It allows export of 25,000 b/d of heavy crude produced by independents, representing about 1% of the state's total use.

President Bush had been reviewing a Commerce Department recommendation for a 3 year trial period of heavy crude exports (OGJ, May 27, p. 23). The California Independent Petroleum Association (CIPA) said that program is no longer being considered.

INDEPENDENTS' BREAK

The license will affect only onshore crudes and those produced by independents.

Major integrated oil companies and independent refiners in California currently aren't required to have licenses to export more than 100,000 b/d of resid, which is similar in composition to the heavy crudes independents want to export.

CIPA Pres. and Berry Senior Vice Pres. Jerry Hoffman said, "It is important to note that the exportation of this surplus California heavy crude will not result in a net loss of barrels, as the program is actually an exchange of domestically produced heavy crude for lighter crudes and finished products."

CIPA lauded the move, seen as a boost for U.S. energy security and a boon to California's oil industry. CIPA noted about 70% of California's oil production is heavy crude.

Thomas Hunt, CIPA's executive vice-president, said, "The export of this surplus heavy crude allows California's independents access to foreign markets that until now were only available to the major U.S. oil companies and refiners."