Status of Strategic Petroleum Reserve Activities

GAO was requested to review the Administration's activities to implement title VIII of the Energy Security Act. This provision requires the President to fill the Strategic Petroleum Reserve (SPR) at an average rate of at least 100,00 barrels per day for fiscal year (FY) 1981 and each succeeding FY. In the preceding report on the status of SPR fill activities, it was noted that, since passage of the Act, the Government had issued contracts for 95 million barrels of oil to be delivered to SPR during FY 1981.

Since the last status report, the Department of Energy (DOE) has signed a multiyear contract with Petroleos Mejicanos (PEMEX), Mexico's State oil company, to acquire up to 110 million barrels of oil for SPR. The PEMEX contract calls for delivery to SPR of 6 million barrels of heavy, high-sulfur crude oil referred to as Maya crude, and 104 million barrels of a blend of Maya and lighter, lower-sulfur Mexican crude oil. DOE will pay $31.80 per barrel and $28.50 per barrel, exclusive of transportation costs, for the blended oil and Maya crude oil, respectively, which is delivered under the contract during September 1981. In addition to the PEMEX contract, the Government has also awarded contracts in response to the February 1981 open continuous solicitation.