Joseph P. Kennedy III has been at work on an unorthodox scheme to provide cheap heating oil to poor and elderly families in the Northwest.

A family friend, an industry source and the director of the Massachusetts Energy Office said Kennedy, 27, has spoken to them about a plan he has been developing for the past several months to broker the purchase of crude oil overseas and refine it for distribution in this heavily oil-dependent region.

In a statement released Friday afternoon, Kennedy said, "I have no oil. I have no program to provide low cost heating oil. When and if a program is developed I will formally announce its purpose and its plan.

"Unitl then, further discussions can only raise false expectations and make a difficult problem worse for the low-income prople who face high oil heating bills this winter," the statement concluded.

However, during a Washington party he attended with his wife on Oct. 15 in honor of Saudi Arabian Oil Minister Ahmed Zaki Yamani, Kennedy reportedly admitted to another guest that he was working on "a philanthropic effort" that involved oil importation.

And an industry source familiar with the local petroleum importing market, as well as a longtime Kennedy friend and campaign fund-raiser, Jack Campbell, both confirmed that Kennedyt has been quietly negotiating with representatives of the Organization of Petroleum Exporting Countries.

Kennedy, who railed against the major oil companies at the dedication here of the John F. Kennedy library a week ago, has been in Algeria since last Sunday, according to Campbell, owner of a radio station in Plymouth, Mass.

Massachusetts Gov. Edward King, whose energy secretary, Joseph Fitzpatrick, met with Kennedy two weeks ago, has offered to help store and distribute any oil Kennedy brings into the state. This week oil prices soared to 85 cents a gallon in Massachusetts, nearly double last year's price.

Funding for the scheme reportedly calls for the development of a nonprofit corporation to which businesses, foundations and individuals would be invited to contribute.They would recover their initial investment when the oil was ultimately sold in the United States.

Kennedy's oil was to be sold for between 60 to 65 cents a gallon, according to Campbell and an industry source Kennedy has tapped for business advice.

The oil would be refined in the seller countries and broken down into gasoline and residual oil as well as heating oil. The gas and residual oil would then be sold back to the refinery at full market value, and the profit would be used to bring down the price of the remaining heating oil, which would then be shipped to the East Coast.

"Joseph Kennedy is a true public servant, he's not someone who's looking for money or trying to make money." said Campbell in response to some news reports pegging the plan as a publicity stunt.

"He's absolutely dedicating to helping the underprivileged, and there's no one on God's earth who can tell me he's trying to do this to set himself up for any publicity he might get out of it."

Kennedy is a son of the late Robert F. Kennedy.