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Iraq: Basra Crude Reaches California

by Verne KopytoffSan Francisco Chronicle
October 15th, 2003

Your car could be running on gasoline made from Iraqi oil.

ChevronTexaco and ConocoPhillips both imported Iraqi crude to California in August, according to a filing Tuesday by the Energy Information Administration, the statistical arm of the U.S. Department of Energy.

The shipments mark the first time that Iraqi oil has reached California shores since the United States launched its invasion to unseat Saddam Hussein in March. It also represents a big step toward normalcy for California drivers.

Before the war, Iraq had been California's biggest source of foreign oil. It accounted for 20.1 percent of all the state's imports in 2002, or 6.09 percent of total supplies.

But the link was cut after the United States attacked Iraq in March. When the war was declared over, oil companies stayed on the sidelines because of the uncertainty over who exactly owned the crude.

Iraq's state-owned oil marketing company eventually reorganized and began awarding oil export contracts to foreign firms in June. The proceeds go to a fund controlled by the United States and its allies that is earmarked for rebuilding Iraq.

ChevronTexaco, based in San Ramon, was the first American firm to get a contract from Iraq, for 2 million barrels. It has since signed a longer-term deal for an undisclosed amount of Basra crude covering the period between early August and Dec. 31, according to ChevronTexaco. The oil company declined to disclose the amount it paid.

The ultimate destination of ChevronTexaco's Iraqi oil was disclosed in a regular monthly filing by the Energy Information Administration that details all U.S. oil imports.

It said that ChevronTexaco shipped 461,000 barrels of crude to Richmond, where the company has a refinery. Two other shipments totaling 1.05 million barrels went to El Segundo, near Los Angeles, home to another refinery.

Stan Luckoski, a ChevronTexaco spokesman, declined to say whether the Iraqi crude was refined into gasoline and then sold at pumps in California. He called it proprietary information.

ConocoPhillips, based in Houston, shipped 460,000 barrels of Iraqi crude to Los Angeles, according to the Energy Information Administration. The company could not be reached for comment.

Severin Borenstein, director for the Energy Institute at UC Berkeley, said that the Iraqi crude imported into California probably already has been refined. It's impossible to say what cities or stations it ultimately went to because oil and gasoline from multiple sources gets mixed during production and distribution.

"If it came into California in August, it is almost certainly in our gasoline,'' Borenstein said. "And it may have come and gone,'' he said, explaining that the entire cycle from the shipment's arrival, to refining, and then to the gas pump typically takes 30 days.

The Energy Information Administration reported in September that other companies imported Iraqi oil in July. But those firms, including Valero and BP, shipped the crude to Texas, not California.

CHART: IRAQ'S PIPELINE TO CALIFORNIA

Iraq has historically been a big supplier of California's crude, accounting for one fifth of all the state's imports in 2002. The spigot was cut when the United States invaded Iraq in March, but it was restored in August.

-- Sources of oil in California

Foreign imports 30.3%
Domestic 69.7%.

-- Sources of foreign oil imports

Iraq 20.1%
Saudia Arabia 19.5%
Ecuador 13.7%
Mexico 8.4%
Angola 8.3%
Argentina 7.3%
Yemen 3.7%
Australia 3.5%
Others 15.4%

Source: California Energy Commission
Chronicle Graphic





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