Department of Homeland Security

US Approves 6 Waivers For Non-US Ships To Load Oil-Sale Crude

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July 17, 2011

Department of Homeland SecurityNEW YORK (Dow Jones)–Six waivers have been approved to allow some buyers of crude oil in the government’s emergency sale to use foreign-flag vessels to load the oil, according to the Department of Homeland Security.

Joanne Ferreira, a spokesman at the agency’s Customers and Border Protection unit, said four other waivers still are being reviewed.

On Monday, the government awarded contracts for 15 companies–including major refiners, trading houses and banks–to buy 30.64 million barrels of crude under an emergency sale from the Strategic Petroleum Reserve. The sale was part of a coordinated move among consumer nations in the International Energy Agency to place about 60 million barrels in the market by the end of August to help cover a short-fall in supply caused by the civil war in Libya.

In two previous sales, the government issued a blanket waiver from the Jones Act, the requirement that any ship carrying goods from port to port along the U.S. coast must be U.S.-made, and have a crew comprised predominately of U.S. citizens. Saying there were sufficient U.S. ships available, the government reversed a decision to again give a blanket waiver, and said it would consider waivers on a case-by-case basis within 48 hours of submission. Government officials wouldn’t release the names of companies which had requested or received waivers.

More than 25 million barrels of the oil sold, or 82%, will move by ship, while 18% will be delivered by pipeline, with just a single 150,000 parcel being delivered by barge, Energy Department data show. Schedules are still being arranged, but about 7 million barres of the crude could be shipped in July to buyers who requested early delivery, while the remainder would be delivered in August, a government source said.

-By David Bird, Dow Jones Newswires

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