Daniel Robinson, president of Placid, said the storm damage meant that suppliers had not been able to deliver enough oil to his refinery to allow it to run at capacity. As a result, he said, his refinery has been running about 25 percent below normal production.
That prompted Placid to request oil from the Energy Department's reserve.
Markets have been jittery in part because of concerns about attacks on oil operations in Iraq.
(Hadi Mizban -- AP)
|
|
"This could have been a nightmare," Robinson said. "We just couldn't be more pleased with how they addressed the situation."
Placid began receiving oil from the reserve yesterday, Robinson said. Without it, his refinery would not have been able to produce as much automobile fuel and home heating oil as normal, or meet contractual requirements to provide military jet fuel to the Defense Department, he said.
Robinson said he intended to replace the oil by the end of the year along with a "small negotiated premium." He would not disclose the amount of the premium.
The other company to receive oil, Shell Trading (U.S.) Co., based in Houston, also would not disclose terms of the loan.
A spokesman for the company, Mark Singer, would only say that the oil was needed to "help insure the continued and adequate production of gasoline and oil products for the Gulf Coast region."
The petroleum reserves have become an issue in the presidential campaign. On Thursday, a spokesman for Sen. John F. Kerry (Mass.), the Democratic presidential nominee, criticized the Bush administration for not dealing sooner with rising energy prices. The Bush campaign said the reserves should be used only in the event of an emergency supply disruption and not to manipulate prices.
Before the loans, the petroleum reserve contained about 670 million barrels of oil -- enough to supply 33 days of domestic consumption, according to the American Petroleum Institute.
