(Updates with 6.1 million barrels expected to be added through resumption of royalty-in-kind oil-fill program)
By Siobhan Hughes
Of DOW JONES NEWSWIRES
WASHINGTON -(Dow Jones)- The Bush administration on Friday resumed buying oil for the U.S. emergency stockpile, seeking to fill the reserve to the maximum by year's end after a plunge in prices and the expiration of a law that had banned purchases.
The U.S. Energy Department said it has initiated a plan to buy 12 million barrels of crude oil to replenish supplies sold after hurricanes Katrina and Rita in 2005. It also noted the Strategic Petroleum Reserve would receive another 5.395 million barrels of oil from refiners by May, reflecting repayment for oil loaned after hurricanes Gustav and Ike last year.
The additions, along with more than 8 million barrels under a program that allows companies that produce crude under federal leases to pay royalties with oil shipments instead of cash, would leave the emergency stockpile at its limit. The stockpile can hold 727 million barrels of oil. The reserve held 567 million barrels when President George W. Bush took office.
Last year, as oil prices rocketed to $120 a barrel and beyond, Congress passed a law requiring the administration to stop making purchases. With oil prices closing last year at $44.60 a barrel, down by more than half, and the law expiring, the current administration wants to resume buying and end the Bush presidency by setting in motion plans for a fully replenished emergency reserve.
"The SPR is a critical component of our nation's energy and national security," DOE spokeswoman Healy Baumgardner said in a statement.
Under its program to buy oil directly, the DOE said it is seeking offers for crude oil deliveries in February, March and April.
In addition to the oil loaned out after last year's hurricanes, the DOE said it expected another 120,000 barrels as payment for the oil loans.
It also said it would receive 2.178 million barrels of oil in the form of deliveries under the royalty-in-kind program, which had been scheduled for 2008 but later deferred.
The DOE also projected another 6.1 million barrels would flow into the emergency stockpile, reflecting the resumption of a royalty-in-kind oil-fill program that aims for deliveries at a rate of 25,000 barrels a day. Those deliveries would begin in May 2009.
At current prices, the oil to be added to the reserve has a market value of more than $1.1 billion.
Chart of Additional Supplies for the Emergency Reserve: Direct Purchases: 12 million barrels (estimated) RIK Transfer Program: 6.1 million barrels (estimated) 2008 Hurricane Returns: 5.51 million barrels Deferred RIK Deliveries: 2.18 million barrels Total: 25.79 million barrels -By Siobhan Hughes, Dow Jones Newswires; 202-862-6654; Siobhan.Hughes@dowjones.com
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Publié le 02 janvier 2009 Copyright © 2009 Dowjones