Companies express interest in U.S. SPR oil sale

Tue Jun 28, 2011 3:34pm EDT

* Two firms asking about moving 500,000 barrels of oil

* U.S. govt will try to find U.S. ships to move the oil

* Firms doing business in Iran can't bid on SPR oil

By Tom Doggett

WASHINGTON, June 28 (Reuters) - Almost a dozen oil companies and trading firms took part in a call with government officials on Tuesday to discuss details on the U.S. sale of millions of barrels of oil from strategic stocks as part of a global effort to drive down oil prices.

The Energy Department hosted the pre-bid call for the planned sale of 30 million barrels of oil on Wednesday to answer questions about a U.S. shipping law which normally prevents foreign vessels from moving crude between U.S. ports.

On the call were representatives from BP Plc (BP.L), Norway's Statoil (STL.OL), Valero Energy Corp (VLO.N), Faroe Petroleum (FPM.L), Morgan Stanley (MS.N), JP Morgan_(JPM.N), Hetco, which is partially owned by Hess Corp (HES.N), and Koch Industries' oil trading arm.

The representatives from Valero and Hetco asked about the availability of U.S. tankers that could move 500,000 barrels of oil.

None of the companies on the call specified whether they would bid on any of the reserve's oil. Electronic bids were due at the Energy Department on Wednesday by 1 p.m. central time (1700 GMT).

The Energy Department officials declined to say whether they would hold another sale if the bids fell short of expectations.

The department said winning companies could request a waiver from the U.S. shipping law, known as the Jones Act, if needed.

The law, created to support jobs in the U.S. maritime industry, requires that goods, such as oil, moved between U.S. ports be carried by ships built in the United States, owned by Americans and operated by U.S. crews.

The government would notify companies if there was a U.S.-based ship available to move their crude. If an American vessel was not available, Jones Act waivers would be granted, officials said.

The department also said companies cannot bid on the crude if they do business with Iran, which could affect some foreign oil companies.

The crude from the SPR will be delivered to the winning bidders in August.

The Obama administration announced its plan last week in conjunction with other industrialized nations.

(Reporting by Tom Doggett; Editing by David Gregorio)

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