Chevron halts its import of Iraqi oil
www.bayarea.com Posted on Tue, Mar. 11, 2003 By Rick Jurgens CONTRA COSTA TIMES
SAN RAMON - Oil giant ChevronTexaco Corp., which accounted for 25 percent of U.S. imports of Iraqi crude oil in 2002, hasn't contracted for any shipments from Iraq for a month because of uncertainties related to the threat of war, according to a company spokesman.
"The most recent lifting by the company of Iraqi crude was in late January or early February," said Chris Gidez, a ChevronTexaco spokesman.
Some news reports suggested that San Ramon-based ChevronTexaco -- which imported 41 million barrels of Iraqi crude last year, according to the U.S. Energy Information Administration -- turned off the spigot in order to avoid negative publicity or as a political statement.
But Gidez said that ChevronTexaco's action wasn't the result of a "decision or policy per se" regarding Iraqi oil. "What you look for is reliable, economic sources" of crude oil, and Iraq doesn't fit the bill currently, Gidez said. ChevronTexaco hasn't ruled out future buys of Iraqi crude, he said.
Iraq sits atop the world's second-largest reservoir of oil. While Iraqi oil exports were banned by United Nations sanctions after the Gulf War of 1991, since 1996 ChevronTexaco and other U.S. oil refiners have bought Iraqi crude under the auspices of a UN humanitarian program known as "Oil for Food."
ChevronTexaco imported 3.3 million barrels of Iraqi crude oil during December, all for use at its Richmond and El Segundo refineries. For the year, ChevronTexaco imported 30.8 million barrels of Iraqi crude into California.
During December, Iraq was the source of about one-third, or 923,000 barrels, of the 2.8 million barrels of oil that ChevronTexaco imported for processing at its Richmond refinery, which converts up to 225,000 barrels a day, or about 7 million barrels a month, into gasoline and other products. A barrel is 42 gallons.
All of Richmond's December imports came from the Gulf region: 1.4 million barrels from Saudi Arabia and two 240,000-barrel shipments, one from Kuwait and one from the United Arab Emirates. Domestic crude oil used at the refinery is not reflected in the EIA data.
On Feb. 18, a few weeks after Iraq dispatched its last shipment of oil to ChevronTexaco, Chief Executive Dave O'Reilly told an industry conference in London that it gathered "against a backdrop of conflict and civil unrest -- from Iraq to Venezuela to the Korean Peninsula."
"Petroleum isn't the reason for these conflicts," O'Reilly added. "But it's no coincidence that energy is a central element in each."
Opponents of a U.S. attack on Iraq have frequently argued that a desire to control that energy wealth drives U.S. policy. O'Reilly acknowledged that a majority of Europeans buy that argument: "'No blood for oil' has caught on partly because our industry's reputation is so impaired that the protesters can discredit action in Iraq simply by associating it with us," he said.
The oil industry should respond by stepping up public relations activities to enhance its reputation and by improving its human rights and environmental performance, O'Reilly said.