DOE announces first direct purchases of crude for SPR since 1994
The US Department of Energy made its first direct purchases of crude oil for the Strategic Petroleum Reserve since 1994 as it awarded contracts to purchase nearly 10.7 million bbl.
The US Department of Energy awarded contracts on Jan. 16 to purchase nearly 10.7 million bbl of crude oil for the Strategic Petroleum Reserve. The awards were the first direct purchases of crude for the reserve since 1994, it said.
DOE said that it awarded the contracts to Shell Trading Co. and to Vitol Inc. to deliver crude 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 approximately 26,000 bbl of crude daily.
These awards will result in the addition of nearly 6.16 million bbl of crude to the SPR's inventory from May 2009 through January 2010, DOE said.
It said that both sets of awards resulted from separate contract solicitations on Jan. 2. DOE said that it decided to solicit the crude following sharp crude oil price declines during 2008's second half which made the purchases more economically favorable.
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