DOE eyes floating oil storage facility

The Department of Energy (DOE) is looking to procure a floating oil storage facility as an initial measure in its plan to establish the country’s strategic petroleum reserve (SPR), its top official said yesterday.

During the Senate budget hearing yesterday, Energy Secretary Alfonso Cusi said the agency is working on putting up a strategic oil reserve in case of emergency.

However, the SPR facility would take a long time to construct.

“It takes at least two years to make it happen because of construction of storage facilities. In case of emergency, we can have a floating storage,” Cusi said.

In explaining the floating storage facility, DOE undersecretary Donato Marcos said a vessel could be used as storage while the onshore SPR is still being constructed.

“We can lease the floating vessel for the time being before completing the SPR,” he said.

The floating SPR can double the current minimum inventory requirements—30 days for crude oil, 15 days for finished products and seven days for liquefied petroleum gas (LPG).

Since last year, the DOE has been pushing for the establishment of a strategic oil reserve for the country.

This is part of the agency’s long term solution in shielding the country from the price volatility in the international oil market and in ensuring fuel supply security.

Meanwhile, the DOE has also been in discussions with oil producers for an agreement to source finished petroleum products.

Among the countries the agency is in talks with include Saudi Arabia, Qatar, Brunei and Russia.

“We have been negotiating for a bilateral agreement na we should get allocation from oil producers just in case there will be a supply problem. It’s a governmentto-government deal to ensure there is continuous supply,” Cusi said.

The DOE had earlier directed PNOC-Exploration Corp. (PNOC-EC) to engage in the selling of petroleum products sourced from nonOPEC members to independent petroleum dealers and to vulnerable sectors, such as public utility transport groups.

Cusi, who is also the ex-officio chairman of the PNOC-EC, said the move was meant to enhance competition among existing oil industry players and stabilize domestic oil prices.

During that time, global oil prices skyrocketed to $80 per barrel while the peso’s weakness against the dollar drove local fuel prices higher.