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DOE Does Not Accept SPR Bids and Suspends Plans for Future Purchases

May 2, 2007 - 12:45pm

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WASHINGTON, DC - The U.S. Department of Energy's Office of Fossil Energy has rejected all offers received from the second solicitation issued this spring that sought to purchase up to four million barrels of crude oil for the United States' crude oil reserve.  Both solicitations resulted in no awards because the Department determined that the bids were too high and not a reasonable value for taxpayers.

The solicitations for the purchase of crude oil were meant to replace oil sold on an emergency basis after Hurricane Katrina caused significant damage to the production, distribution, and refining capabilities of the oil industry in the Gulf Coast region.  The Government planned to use proceeds of $584 million from the emergency sale for the purchase of crude oil. 

The Department plans to suspend direct purchases of oil for the SPR until at least the end of the summer driving season. 

The Strategic Petroleum Reserve has a capacity of 727 million barrels and currently holds 689 million barrels in inventory.

A separate Strategic Petroleum Reserve fill program, the Royalty-in-Kind program, is proceeding according to schedule. DOE earlier issued a solicitation seeking bids by May 8, 2007, for contracts to exchange up to 9 million barrels of royalty oil from Federal leases in the Gulf of Mexico that meets the specifications of the Strategic Petroleum Reserve.

Media contact(s):

Anne Kolton, (202) 586-4940

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