Contract for SPR oil repurchase

The US DOE has announced the award of contracts for the delivery of crude oil to the SPR. BP Products North America Inc., is to deliver 2 197 500 bbls and Noble Americas will deliver 2 million bbls to the Reserve’s Bryan Mound site in Freeport, Texas. Deliveries are expected to be completed by the end of July this year.

The awards are repurchasing crude oil that was sold during a 2014 test sale, using US$239.2 million of funds from the sale. The DOE is required by law to buy back petroleum products within a year of completion of a test sale to the extent funds are available from the sale. Funding from the test sale was also used to establish the Northeast Gasoline Supply Reserve last year.

The SPR is the largest stockpile of government owned emergency crude oil in the world. Established in the aftermath of the 1973 – 1974 oil embargo, the reserve provides the President with a powerful resource option should a disruption in commercial oil supplies threaten the US economy. It also allows the US to meet its IEA obligation to maintain emergency oil stocks, and it provides a national defence fuel reserve. The reserve currently holds 691 million bbls of crude oil in four storage locations in Louisiana and along the Texas Gulf Coast.

Edited from press release by Claira Lloyd

Read the article online at: https://www.hydrocarbonengineering.com/refining/10042015/spr-repurchase/