Some Refiners Limit Sales, Beef Up Security

A number of oil refiners have imposed limits on the amount of gasoline some of their customers may buy, anticipating panic buying if war breaks out in the Persian Gulf, industry officials said Monday.

Meanwhile, major oil companies have been beefing up security at refineries and other facilities in the Southland and elsewhere in the United States to guard against terrorist attacks.

Oil industry officials said they were confident, however, that world and U.S. inventories of crude oil and refined products--such as gasoline--were ample even if war breaks out. As a result, few would admit that they have put together contingency plans in the event that things don’t go as expected.

Those who said they have contingency plans declined to detail them, except to acknowledge that they had been building inventories. “We think it’s counterproductive to discuss them in public,” said Mobil Corp. spokesman John Lord.

Industry officials said any shortfall resulting from a war could easily be made up from high inventories of crude held in storage by Saudi Arabia and Iran and from huge strategic petroleum reserves in the United States and other nations.

But one industry official, who declined to be named, cautioned that spot shortages of refined products could still develop as the industry’s network of pipelines, tankers and refineries adjusts to shifts in the balance of world crude oils--or if consumers react to war by hoarding gasoline.

Also, if refineries in Saudi Arabia and the rest of the Persian Gulf are damaged, supplies of jet fuel, gasoline and other products could be disrupted, particularly in the Far East, said Fereidun Fesharaki, an analyst with the government-funded East-West Center in Honolulu. The U.S.-led military force in the gulf would be a major consumer of such products if war breaks out, he noted.

Refiners such as Ashland Oil Inc., Diamond Shamrock Inc. and Phillips Petroleum Co.’s Phillips 66 Co. said they had already placed limits on sales to some customers, primarily wholesale distributors of gasoline to independent stations. Such customers can buy 100% of past sales--but no more--to counter hoarding, spokesmen said.

Other refiners, such as Sun Co. and Santa Fe Springs-based Golden West Refining Co., said they have allocation plans if panic buying begins.

Meanwhile, spokesmen for several major oil companies, including Los Angeles-based Atlantic Richfield Co. and Unocal Corp., said they had heightened their security in the event of terrorist attacks. All declined to go into details.

“Everybody is obviously very sensitive to all the rumors and talk about terrorism, and we are just being more security-conscious,” said Arco spokesman Albert Greenstein.

In Alaska, operators of the 800-mile Trans-Alaska Pipeline are now meeting daily with military and intelligence officials to assess security risks to the pipeline, which supplies California with 46% of its crude. That includes talks with the FBI, Army and Coast Guard, as well as with Alaska state troopers.

Marnie Isaacs, a spokesman for the Alyeska Pipeline Service Co., would not say if the pipeline has been targeted for a terrorist attack, but said Alyeska has come up with a plan to repair damage quickly in the event of one.

In San Francisco, Chevron Corp. Chairman Kenneth T. Derr said Monday that the company has “beefed up” security at facilities worldwide in an attempt to prevent terrorist attacks and ward off domestic protesters. “We’ve asked people to review (security measures) and be well aware of the situation that exists,” he said.

“If hostilities break out, there’s going to be a great deal of protests, marches, etc.,” Derr said. “Unfortunately, some of that will be directed at oil and oil companies.”

He added that the company had plans to evacuate 60 employees on loan to Saudi Arabia’s state-owned Aramco oil company if war proves more threatening to them than expected. Times staff writer Victor F. Zonana in San Francisco contributed to this story.

MIDEAST UPDATE Highlights of the economic and business developments related to the Persian Gulf crisis: General Motors said it may make further cuts in first-quarter light truck production.

OPEC oil production in 1990 was the highest in 10 years--averaging 23.15 million barrels a day--despite the boycott of Iraqi and Kuwaiti crude.

German oil companies began raising retail gasoline prices.

TWA said that because its insurance was canceled, it was suspending service to Tel Aviv, Cairo, Istanbul and Athens. Pan Am dropped service to Athens, Istanbul and Ankara, Turkey; and Karachi, Pakistan.

British Airways, Lufthansa and Air France announced reduced service to the Mideast. Garuda Indonesia Airlines suspended all Mideast flights.