Release
The prerequisite for the release of reserves held by the Erdölbevorratungsverband (EBV) is a release decree issued by the Federal Minister of Economics and Energy which sets out the period of time in which such release is to occur as well as the volumes to be released with respect to each product.
Pursuant to Section 12 (5) of the German Oil Stockholding Act, reserves are to be offered on a preferential basis to the member businesses taking into proper account their respective contributions toward EBV’s costs. Accordingly, the individual member businesses receive an allocation letter following the publication of the release decree in the Federal Law Gazette, in which the share of each such business in the product to be released is set out. Their share is determined based on a certain cost sharing matrix for each product.
The product volumes described in the allocation letter are thereafter offered for sale to the businesses at market prices or are otherwise made available through the suspension of delegations. The amounts so offered are generally apportioned equally over four calendar weeks and may thereby be taken up on a weekly basis. The right to receive an allocation expires upon the failure to accept it.
Upon acceptance, releases are submitted to the respective storage facility and an informational copy of the release letter is delivered to the business. The business receives an invoice following receipt of the accepted amounts.
The release period extends over the four-week timeframe for release set out in the release decree. In the event additional reserve amounts are authorised for release through a renewed release decree, the process described above repeats itself.