Fluor Federal Petroleum Operations has won a U.S. Department of Energy (DOE) contract for the management and operation of the Strategic Petroleum Reserve (SPR). The contract has a base term of 5 years with an option to extend the contract term for an additional 5 years, for a total contract period of 10 years. The value for the base contract period is approximately US$697m.
The SPR is the world’s largest supply of emergency crude oil. The federally-owned oil stocks are stored in underground salt caverns in Louisiana and Texas. Decisions to withdraw crude oil from the SPR are made by the U.S. President. In the event of an energy emergency, SPR oil would be distributed by competitive sale. The SPR has been used under these circumstances only three times, most recently in June 2011 when the President directed a sale of 30 mbl of crude oil to offset disruptions in supply due to Middle East unrest.
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