DOE Accepts Offers from 11 Companies To Exchange Oil from Strategic Reserve

Commitment is to Return 31.6 Million Barrels Next Year

New Orleans, LA - The Department of Energy today took the next step to avert a potential heating oil supply shortage this winter by agreeing to exchange 30 million barrels of crude oil with 11 companies who submitted the best offers for acquiring oil from the Strategic Petroleum Reserve. The companies agreed to return 31.56 million barrels to the federal oil stockpile next year.

"These companies offered the best value in terms of restocking the Strategic Reserve a year from now," said Secretary of Energy Bill Richardson in announcing the oil exchange contracts. "Every barrel we can get into the market in the next few weeks reduces the risk of a shortage of heating oil and diesel fuel this winter. This is good for consumers and good for our nation's long-term energy security."

Today's contract awards come 12 days after President Clinton ordered crude oil from the Strategic Petroleum Reserve to be exchanged as one of several steps to boost lagging inventories of critical distillate fuels. Stocks of heating oil in the Northeast are now running nearly 70 percent below last year's low levels.

Today, the department accepted offers from:

Marathon Ashland Petroleum LLC, Houston,TX		2.4 MMB West Hackberry Sweet 1.5 MMB Bayou Choctaw Sour
Euell Energy, Aurora, CO		3.0 MMB West Hackberry Sweet
BP Oil Supply Company, Warrenville, IL		6.0 MMB West Hackberry Sweet
Elf Trading, Inc., Houston, TX		1.0 MMB West Hackberry Sweet
Equiva Trading Company, Houston, TX		0.5 MMB Bayou Choctaw Sour 2.0 MMB West Hackberry Sweet
Morgan Stanley Dean Witter, New York, NY		1.5 MMB West Hackberry Sweet 0.5 MMB Bryan Mound Sour
Vitol S.A., Inc., Houston, TX		1.05 MMB West Hackberry Sweet 0.55 MMB Bryan Mound Sour
Valero Marketing and Supply Co.,San Antonio, TX		1.0 MMB Bryan Mound Sour
Burhany Energy Enterprises, Inc., Tallahassee, FL		3.0 MMB West Hackberry Sweet
Lance Stroud Enterprises, Inc., New York, NY		4.0 MMB West Hackberry Sweet
Hess Energy Trading, New York, NY		1.0 MMB West Hackberry Sweet 1.0 MMB Bryan Mound Sour

The Energy Department will move the crude oil as soon as the companies can make delivery arrangements. All of the oil will be transferred to the companies by the end of next month, although some deliveries could be scheduled earlier.

The Energy Department has estimated that releasing 30 million barrels of crude oil at a time when refineries would normally be gearing back could encourage production of from 3 to 5 million barrels of additional heating oil that would be placed in commercial inventories.

Oil to be returned to the Reserve will be delivered between August and November of 2001. Because the Administration will continue to monitor fuel supply levels and could take further steps, including additional oil exchanges, the Energy Department is not releasing the individual amounts to be returned by individual companies at this time. Disclosing the specific exchange ratios at this point could bias future offers should the exchange process be repeated.

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