A Fluor (NYSE: FLR) subsidiary has received a potential $2B contract extension to continue to manage and operate the country’s emergency crude oil supply for the Energy Department.
DOE exercised a contract option for Fluor Federal Petroleum Operations to continue life extension construction and engineering work for the Strategic Petroleum Reserve through March 31, 2024, the company said Wednesday.
“We are pleased that the Department of Energy has confidence in our performance and ability to deliver on the important work that is underway on the SPR,” said Tom D’Agostino, president of Fluor’s government group.
D’Agostino added that the contract extension aims to demonstrate the company’s more than a century’s experience in the oil and gas sector and efforts to support national security goals.
Fluor said it will book the contract extension in the third quarter of 2018.
The U.S. government stores SPR crude oil in underground salt caverns in Texas and Louisiana, and in the event of an energy emergency, the U.S. president can decide to draw out oil from the reserve.
Congress mandated sales of oil from the reserve in 2017 and this year to increase revenue for the Treasury and support modernization efforts at SPR.