Shell, Chevron and Exxon land contracts for Strategic Petroleum Reserve - August 24, 2003

Providing coverage of Alaska and northern Canada's oil and gas industryAugust 2003

Vol. 8, No. 34

Week of August 24, 2003

Shell, Chevron and Exxon land contracts for Strategic Petroleum Reserve

Petroleum News

Shell, ChevronTexaco and ExxonMobil have been awarded contracts by the U.S. Minerals Management Service for oil exchanges from federal offshore leases in the Gulf of Mexico to help fill national Strategic Petroleum Reserve storage sites in Texas and Louisiana. The contracts involve more than 53,000 barrels per day of Gulf royalty oil from 19 offshore meters. MMS will take its royalty oil in-kind and deliver it to onshore oil market centers where the U.S. Department of Energy will take custody of the oil. DOE will then exchange the royalty in kind oil for oil of suitable quality that can be delivered to SPR storage sites.

In addition to the new contracts, there are various other existing contracts to support President Bush's SPR fill initiative for additional oil volumes of up to 77,000 barrels per day. The president's initiative is focused on filling the SPR to its nearly 107 million barrel capacity. SPR oil could be drawn in the event of a national emergency.

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