The crude will be stored in the Strategic Petroleum Reserve, a series of underground salt caverns in Louisiana and Texas. The reserve was set up years ago to have an emergency supply of oil always ready.

The reserve currently holds 563 million barrels of oil and has 117 million barrels on free space. By taking some of the stored oil from the companies, the department will avoid using taxpayer money to purchase crude for the reserve.

The department said its offer would also help oil companies, who do not want sell their crude at the current low market prices of around less than $15 a barrel. When oil prices rise again, companies can then sell their crude.

"The initiative is likely to prove especially attractive to companies that currently are encountering difficultiesfinding commercial storage space for surplus oil." the department said.

The department will initially store 5 million barrels. It will then seek three more solicitations, each for 5 million barrels of space, during the next three months.

The first oil could be delivered to the reserve in September. The department said it would award space in the reserve based on the quality and amount of oil a company offers to store. The department will take ownership of its portion of the oil when the crude is delivered.