A bill to fully explore, fully develop, and produce the naval petroleum reserves with the revenue derived therefrom to be placed in a special fund for such exploration, development, and production, for production to be applied to the petroleum needs of the Department of Defense and for the establishment of a study group to investigate the feasibility of creating a National Strategic Petroleum Reserve (military) and for other purposes.

(Reported to House from the Committee on Armed Services with amendment, H. Rept. 94-156)

Provides that in order to place specified naval petroleum reserves in a proven state of readiness to produce petroleum, the Secretary of the Navy is authorized to explore, develop, operate, and produce petroleum from Naval Petroleum Reserves Numbered 1, 2, and 3 at a rate consistent with sound oilfield engineering practices up to 200,000 barrels per day for three years; and to construct or procure pipelines and associated facilities for transporting oil, associated liquids, and gases, from such Reserves.

Requires reports on such activities to the Armed Services committees of the Senate and House.

Requires each sale of the United States share of petroleum, gas, other hydrocarbons, oil shale, or products therefrom to be made by the Secretary at public sale to the highest qualified bidder at such time, in such amounts, and after such advertising as the Secretary considers proper.

Establishes the naval petroleum and oil shale reserves special fund on the books of the Treasury. Prescribes revenues to and expenditures from such fund.

Directs the Secretary to establish a study group to investigate the feasibility of creating a national strategic petroleum reserve for military purposes.