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The
NewsRoom
Release #: 3068
Date: March 24, 2004
Strategic Petroleum Reserve Exchange Contracts Awarded;
MMS,
Wyoming Team up on RIK Sale
Three major oil companies have been awarded
contracts by the Minerals Management Service (MMS) for the exchange of
an estimated 100,405 barrels per day of Gulf of Mexico Royalty-in-Kind
(RIK) crude oil to support the national Strategic Petroleum Reserve
Fill Initiative unveiled by President George W. Bush in November
2001.
With these contracts,
MMS will take its oil royalties in-kind (in the form of product),
rather than in value (cash), from offshore federal lease operators and
deliver it to onshore oil market centers where the Department of
Energy (DOE) will take custody of the oil. The DOE, in turn, will
exchange the RIK oil for oil of suitable quality that can be delivered
to Strategic Petroleum Reserve storage sites located in Texas and
Louisiana.
The RIK program
provides a deliberate and cost-effective means to continue filling the
nation’s Strategic Petroleum Reserve in support of national objectives
for energy security and to mitigate potential supply disruptions.
Contracts in the latest
sale were awarded to ChevronTexaco, Shell Trading and ExxonMobil.
Delivery on the six-month contracts is scheduled to begin April 1,
2004. The oil will be delivered from more than 100 facility metering
points in the Gulf of Mexico.
The MMS RIK Program
Office will also ship an additional 12,135 barrels per day of royalty
crude oil directly to DOE at onshore market centers, with one producer
transporting an additional 2,700 barrels per day directly to the DOE.
That translates to a total of approximately 115,000 barrels per day of
wellhead oil being committed to the Strategic Petroleum Reserve Fill
Initiative. To date, approximately 646 million barrels of oil have
been added toward the approximate 700 million barrel capacity of the
Strategic Petroleum Reserve.
Joint Wyoming Sale
The Minerals Management
Service also announced that it has again teamed with the State of
Wyoming for the sale of royalty crude oil produced in Wyoming. The
February sale was the 12th in a series of joint sales
dating back to 1998 when the State of Wyoming and the MMS first
entered into the Wyoming Oil Pilot Program.
Three firms were
awarded contracts for approximately 1,300 barrels per day of both
Federal and State sweet and general sour production. Winning bidders
were Teppco, Nexen and Tesoro Refining. Delivery is scheduled to
begin April 1, 2004, and continue through Sept. 30, 2004.
The Minerals Management
Service is the federal bureau 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 bureau
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 it 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
Patrick Etchart
(303) 231-3162
Nicolette Humphries
(202) 208-3985
MMS: Securing Ocean Energy & Economic Value for
America
U.S. Department of the Interior |