SPR: Few Oil Companies Interested In Using US SPRgreenspun.com : LUSENET : TB2K spinoff uncensored : One Thread
NEW YORK, Oct 3 (Reuters) - President Bill Clinton may have ordered the release of oil from the nation's strategic reserves but Washington is having mixed results in its effort to sell the crude, oil companies told Reuters in a poll on Tuesday.
Oil majors such as Royal Dutch/Shell (quote from Yahoo! UK & Ireland: SHEL.L) and Texaco (NYSE:TX - news) through their U.S. downstream venture Equilon, BP Amoco (quote from Yahoo! UK & Ireland: BP.L)(NYSE:BP - news), and Conoco (NYSE:COCa - news) said they have submitted bids for some of the 30 million barrels of oil put on the block.
``We put in a bid for 1.5 million barrels on Friday,'' said Conoco spokesman Carlton Adams.
Hetco, the trading arm of Amerada Hess (NYSE:AHC - news) also said it placed bids.
But No. 1 U.S. oil company Exxon Mobil Corp. (NYSE:XOM - news), Coastal Corp (NYSE:CGP - news) , and Phillips Petroleum (NYSE:P - news) said they have begged off placing offers.
Meanwhile U.S No. 2 Chevron Corp (NYSE:CHV - news), Marathon Oil (NYSE:MRO - news) and leading independent refiner Sunoco Inc (NYSE:SUN - news) which is based in the northeast heating oil consumer hub, declined to comment on whether they had submitted bids.
The U.S. Department of Energy plans to contact energy firms on Wednesday to ensure their bids are ``best and final offers'' for the oil, which Clinton decided last month to release in an effort to prevent a heating oil supply crisis this winter.
A public announcement on the winning bidders is scheduled for Friday.
While the government's efforts have helped bring down crude oil prices nearly $5 to around $32 a barrel Tuesday, some refiners say they are already running near capacity and that the extra crude will not result in higher heating oil yields.
``We're currently producing more 10-15 percent distillate fuel than we were last year. Our refiners are running at maximum capacity.'' said a Exxon-Mobil spokeswoman, ``We don't need the oil.''
Other companies which don't have refining capacity in the U.S. Gulf near the underground salt caverns where the SPR is stored, said that they would not likely take part in the bidding process.
Crude oil traders continue to say that they have not had trouble finding oil to feed refineries in recent months, especially for sour grades as the Organisation of Petroleum Exporting Countries (OPEC) increases output.
``Our contracts are currently satisfying our crude requirements,'' said a spokesman for Phillips.
In addition, U.S. refining capacity will be greatly diminished during October and early November as refiners shut down units for maintenance, reducing crude requirements.
The Clinton administration plan to draw oil from the 571 million barrel reserve has come under fire from Republican Presidential candidate George W. Bush as an election year ploy to bring down oil prices.
Since its creation during the oil crisis of the mid-1970s, the stockpile has been tapped only once for an emergency sale during the Gulf crisis.
But of the 34 million barrels of crude offered then, only 17 million were taken, DOE officials have said.
-- It's the Refinery's Stupid! (whadya@mean?.com), October 04, 2000
-- It's the Refinery's Stupid! (whadya@mean?.com), October 04, 2000.
When an oil company takes oil from the SPR NO money changes hands. The oil co agrees to "pay back" the oil to the reserve within the next 12 months. With the way things are going in the Middle East, the oil will probably sell for more next year so it is a losing proposition to take oil from the SPR for the oil companies. Kitty
-- Kitty in VA (email@example.com), October 04, 2000.