Sales of Crude Oil by Elk Hills Naval Petroleum Reserve

GAO discussed the Department of Energy's (DOE) sale of crude oil from the Elk Hills Naval Petroleum Reserve. GAO summarized the sales data contained in an earlier DOE fact sheet, noting that: (1) DOE sells shares of the crude oil under 6-month contracts by competitive bidding; (2) DOE determines the price of the oil by taking the average of the crude oil price schedules of the major oil companies and factoring in the contract discount and the oil quality; (3) although prices remained stable between October 1, 1985 and February 5, 1986, they began to decline as a result of the decrease in world oil prices; and (4) large base oil price discounts will continue to apply to all oil deliveries through October 1, 1986.