October 5, 2004 8:00 AM, EDT

DOE Lends More Oil from SPR

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he Department of Energy has approved additional loans from nation's Strategic Petroleum Reserve, for a total of 4.2 million barrels of oil.

DOE late last week said that it would lend Crown Oil Co. 1 million barrels from the SPR, in addition to the earlier announcements that ConocoPhillips would receive 1.5 million barrels, Shell Oil Co. 1.4 million and Placid Refining 300,000.

DOE said negotiations were also under way for more releases following disruptions in the Gulf of Mexico region due to the recent hurricanes. The terms require companies to borrow crude oil under short-term contractual agreements and return it to the SPR once supply conditions return to normal.

"We are considering requests [for more releases] and will respond as appropriate," DOE spokesman Drew Malcomb told Transport Topics.

The SPR, held in salt caverns near the Texas and Louisiana coasts, holds a record 670.4 million barrels, Bloomberg News reported.

DOE said it similarly loaned oil from the reserve in October 2002, after Hurricane Lili disrupted normal commercial oil shipments into Gulf Coast distribution hubs.

Meanwhile, OPEC President Purnomo Yusiantoro told Bloomberg News that he expected the U.S. government to release more oil from the reserve as U.S. elections draw closer.

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