WASHINGTON, DC - The U.S. Department of Energy (DOE) today announced that it will seek solicitations to purchase up to four million barrels of crude oil for the Strategic Petroleum Reserve (SPR). This is the first of a series of solicitations planned to replace 11 million barrels of oil sold in the fall of 2005 after Hurricane Katrina disrupted refinery supplies. This would be the first direct purchase of crude oil for the reserve since 1994. The Strategic Petroleum Reserve will use the proceeds from the emergency sale totaling $584 million to complete the purchases.
"The Strategic Petroleum Reserve is a critical national asset that bolsters our energy security," Secretary Bodman said. "By replenishing the Strategic Petroleum Reserve, we can ensure that there are additional supplies of fuel for the American people in cases of severe supply disruption."
The Strategic Petroleum Reserve has a capacity of 727 million barrels, and currently holds 689 million barrels in inventory. The solicitations over the next several months will be staggered so that no single purchase will adversely impact the market price. Bids will be accepted based on fair market value and combinations of sweet and sour crude will be purchased based on price.
At this time, the Department will review proposals in the following quantities: two million barrels of sweet crude to be delivered to the West Hackberry, Louisiana site, and/or two million barrels of sour crude to the delivered to the Bryan Mound, Texas site. Bids are due by April 3, 2007, and contract awards will be made within one week. The delivery period for the crude oil is May 1-31, 2007.
Through the terms of contracts to be issued from the planned series of solicitations, the Strategic Petroleum Reserve seeks to achieve a moderate fill rate of approximately 100,000 barrels per day during the months of May, June and July.
Craig Stevens, (202) 586-4940