Final Contracts Awarded in Strategic Reserve Oil Exchange

Companies More than Double Previous Bonus Percentage of Oil to be Returned

New Orleans, LA - The Energy Department's solicitation for an exchange of the remaining seven million barrels of Strategic Petroleum Reserve crude oil has produced three new contracts.

The department today accepted offers from:

• BP Oil Supply Company, Warrenville, IL, for 3 million barrels
• Vitol S.A., Inc., Houston, TX, for 2.5 million barrels, and
• Marathon Ashland Petroleum LLC, Houston,TX, for 1.5 million barrels.

The contracts complete the 30 million barrels ordered released from the Reserve by President Clinton on September 22, 2000. All three companies were among the successful bidders in the initial round in which 23 million barrels were exchanged.

As in the earlier round, the successful bidders are required to return a comparable quality of crude oil, plus a bonus percentage, next fall. For the 7 million barrels awarded today, the three companies have committed to return 7.57 million barrels between August and November, 2001. The 8 percent bonus oil is more than double the bonus percentage offered in the initial contracts.

Oil is scheduled to be delivered to the companies before the end of December, although as with the previous contracts, the department said it would accommodate earlier delivery requests. Crude oil from the initial round of offers has already begun to move into the market, well in advance of the department's original November target; currently more than 1.6 million barrels has been delivered to the initial group of successful offerors.

All of the 7 million barrels of oil awarded today is low-sulfur, or sweet, crude oil that will come from the Reserve's West Hackberry site in Louisiana.

- End of Techline-

For more information, contact:
News Media: Drew Malcomb, DOE Office of Public Affairs, 202-586-5822

Others: Robert Porter, DOE Office of Fossil Energy, 202-586-6503, e-mail: robert.porter@hq.doe.gov