ARCO RETURNS TRACTS CONTAINING GIANT OIL FIELD TO CALIFORNIA
ARCO has returned controversial offshore leases holding an undeveloped giant oil field off California to the state.
It was part of a proposal ARCO made a year ago enabling the two parties to resolve a dispute over the Coal Oil Point development project off Santa Barbara County while the company proceeds with a significant secondary recovery project elsewhere in the state (OGJ, Jan. 28, 1991, p. 44).
The company had battled the state and county over the right to develop Coal Oil Point oil field with two or three platforms. It would have produced 80,000-85,000 b/d of oil at peak.
The California State Lands Commission (SLC) in May 1987 denied ARCO's request to install two platforms off the Santa Barbara County coast near the University of California at Santa Barbara. ARCO sued SLC and the county for $793 million, claiming their actions were an unjust taking of property (OGJ, Aug. 3, 1987, p. 28). A state court in 1990 ruled in favor of SLC and the county.
ARCO plans to install an improved waterflood in the Long Beach Unit (LBU) that would result in an added 50-80 million bbl of recoverable oil at a cost of as much as $100 million. In return for approval on the LBU project, ARCO agreed to dismiss all claims against the state and surrender the Coal Oil Point leases to the state.
ARCO marked the end of the 4 year dispute by filing quitclaim deeds for the two Coal Oil Point leases with county officials last month. State leases 308 and 309, covering about 4,000 acres in state waters, will be added to the state's coastal marine sanctuary, which is off limits to oil development.
Copyright 1992 Oil & Gas Journal. All Rights Reserved.