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The New York Times: US Says Ready to Loan SPR Oil After Prudhoe Shut

By REUTERS
Published: August 7, 2006
Filed at 8:59 a.m. ET

WASHINGTON (Reuters) – The U.S. Energy Department will consider loaning emergency crude oil to refiners caught short of supply following the shutdown of BP Plc (BP.L) massive Prudhoe Bay oil field in Alaska, a spokesman said Monday.

BP shut down the field, which can produce 400,000 barrels of oil per day, accounting for 8 percent of U.S. domestic crude production, after further corrosion problems were detected on oil pipelines there.

“This is a significant stream of supply, there is no question about it. That is why we have things like the Strategic Petroleum Reserve,” the spokesman said.

Alaskan crude oil is typically used by oil companies with refineries on the West Coast, including BP, Exxon Mobil (XOM.N), Valero (VLO.N), Shell (RDSa.L), and ConocoPhillips (COP.N).

The shutdown of BP’s Prudhoe Bay field slashes Alaskan oil production by more than half.

U.S. oil refiners would have to request oil loans to put the process in motion, the spokesman said. “If it was requested, that is something we are certainly going to take a look at.”

The spokesman added that the Department of Energy will be in touch with BP and any effected refineries today.

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