First U.S. Overseas Sales Since Arab Embargo : Alaska Agrees to Export Oil to Taiwan

Alaska announced Friday that it plans to sell more than 1.3 million barrels of oil to a Taiwan firm, representing the first domestic overseas crude oil shipment since the Arab oil embargo.

Chinese Petroleum Corp. was selected over six other firms--two each from Japan, South Korea and the United States--for a one-year agreement to buy 3,600 barrels per day of oil owned by the state, Alaska Division of Oil and Gas Director James Eason announced.

The United States sells oil to Canada, but there has been no overseas export of American oil for years, and the export of Alaskan oil was specifically prohibited until President Reagan announced that the ban would be removed from some Alaskan oil, said Doug Perry, an oil and gas specialist for the Department of Commerce.

Alaska produces one-fifth of this country’s oil, most of it from the giant North Slope oil fields at or near Prudhoe Bay, and it remains against the law to export this oil, although Alaska officials are seeking to have the ban lifted.

Perry said the export of oil from Cook Inlet near Anchorage probably represents the first oil to be shipped overseas since the Arab oil embargo and the energy crisis that gripped the country in the early 1970s.

At one time, before the development of major Middle East oil fields and the advent of the OPEC cartel, the United States was an oil exporter, Perry said.

Now the United States is a major importer, and the drop in world oil prices has led to predictions that the United States, which now imports one-third of its oil, will increase its imports.

This has made Alaska oil exports controversial, but state officials have been enthusiastic about selling their oil abroad.

Alaska receives royalty oil from four offshore fields southwest of Anchorage in the Cook Inlet basin, and 97% of the state’s royalty oil will be sold to the Taiwan company, Eason said.

Friday’s preliminary decision to sell the oil to Chinese Petroleum Corp. becomes final Jan. 5 following a 30-day comment period.