Current Operator of Strategic Petroleum Reserve Wins New Contract to Maintain Government's Oil Stockpile

Energy Secretary Abraham Cites DynMcDermott's "Superb Job" in Quality Management and Worker Safety

Washington, DC - Secretary of Energy Spencer Abraham today announced that the current contractor for the Strategic Petroleum Reserve (SPR), DynMcDermott Petroleum Operations Company of New Orleans, has won the Energy Department's competition and will continue operating the government's emergency oil stockpile for at least the next five years.

DynMcDermott will receive an estimated $120 million a year to maintain the readiness of the Strategic Petroleum Reserve's four crude oil storage facilities in Louisiana and Texas. The anticipated contract also has provisions for an additional five-year extension.

"DynMcDermott has done a superb job in every facet of operating the Strategic Petroleum Reserve," Secretary Abraham said. "During its recent tenure, for example, the Reserve became only the second Energy Department facility to receive ISO 9001 certification for its exceptional quality management program. All four of its oil storage sites have been named STAR facilities by the Occupational Safety and Health Administration, a designation that only one in 10,000 eligible sites in the United States has received. Plus, they have been responsible for increasing the SPR to 599 million barrels of oil, its highest level ever."

Abraham also called attention to significant reduction in work-related accidents that has occurred since DynMcDermott became the operating contractor for the Reserve in 1993. In 1994, there were 57 recordable accidents at Reserve sites resulting in an estimated cost of $1.1 million and the loss of 1721 workdays. By 2002, DynMcDermott had decreased the number of accidents to only seven with an estimated cost of $95,000 and the loss of only 14 workdays.

"This outstanding record of worker safety and accident prevention took place in a period when the Strategic Reserve saw heavy construction, executed several oil drawdowns, decommissioned one of its sites, responded to the need for enhanced security in the post-9/11 timeframe, and implemented the President's initiative to fill the Reserve to its full capacity," Abraham said.

The new contract will take effect on April 1, 2003. DynMcDermott is a 650-employee company formed solely to operate the Strategic Reserve. It is jointly owned by DynCorp, Reston, VA; McDermott International Inc., New Orleans; Jacobs Engineering, Pasadena, CA; and International-Matex Tank Terminals, New Orleans.

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