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The
NewsRoom
Release #: 3033
Date: February 25, 2004
RIK
Crude Oil Contracts Helping Small Refiners
Four small refiners
have been awarded contracts for the purchase of approximately 53,000
barrels per day of Royalty-in-Kind (RIK) crude oil produced in the
Gulf of Mexico and the Pacific Ocean, the Department of the Interior’s
Minerals Management Service (MMS) announced today.
“Small refiners
continue to face market challenges in locating and acquiring adequate
crude oil supplies,” said MMS Director Johnnie Burton. “This program
provides those small refiners access to a consistent oil supply at
market prices, benefiting small refiners and their local economies as
well as the Federal government.”
The four contracts were
awarded to winning bidders as part of the Minerals Management
Service’s Small Refiner Program, where oil royalties are taken
“in-kind” from Federal offshore leases and sold to qualified small
refiners. Delivery on the one-year contracts is scheduled to begin
April 1, 2004.
The four small refiners
who won contracts include Paramount in California; Gary Williams with
headquarters in Colorado and a refinery in Oklahoma; U.S. Oil with
offices in California and Washington state; and Placid, based in
Louisiana. In many cases, these small refiners provide specialized
capabilities, such as producing jet fuel for use by nearby Department
of Defense installations.
According to Burton,
small refiners often experience difficulty in accessing a consistent
oil supply at market prices placing them at a competitive disadvantage
to larger refiners. For that reason, MMS has long made oil produced on
Federal leases available to these companies. MMS also conducts
periodic reviews of the program to determine its continued benefit to
small refiners by providing consistent access to crude oil at
equitable prices.
The Royalty in Kind
Program also continues to provide benefits to the Federal government
and taxpayers by optimizing taxpayer assets, reducing regulatory costs
and requirements, and improving overall business efficiencies.
The Minerals Management
Service is the federal agency in the U.S. Department of the Interior
that manages the nation’s oil, natural gas and other mineral resources
on the Outer Continental Shelf in federal offshore waters. The agency
also collects, accounts for, and disburses mineral revenues from
federal and American Indian lands. MMS disbursed more than $8 billion
in 2003 and more than $135 billion since the agency was created in
1982. Nearly $1 billion from those revenues go into the Land and
Water Conservation Fund annually for the acquisition and development
of state and federal park and recreation lands.
Relevant Web Sites
MMS Main Website
Media Contacts
Pat Etchart
(303) 231-3162
Nicolette Humphries
(202) 208-3985
MMS: Securing Ocean Energy & Economic Value for
America
U.S. Department of the Interior |