California State Lands Commission Staff Report Summary
California State Lands Commission's staff report discusses the history and operations of Platform Holly and PRC 421. Platform Holly, installed in 1966, ceased production in 2015 due to an oil spill event, and Venoco LLC later notified the Commission of its inability to meet lease obligations. Pier 421-1 and Pier 421-2 are part of PRC 421, which has a long history dating back to the 1920s. The report highlights the decommissioning process and events leading up to it, such as the Refugio Oil Spill in 2015.
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California State Lands Commission JUNE 22, 2017 STAFF REPORT NUMBER: 76 SETH BLACKMON SENIOR STAFF COUNSEL, LEGAL DIVISION 1 Serving the Public Trust Since 1938
Venoco Update 2 Serving the Public Trust Since 1938
2 wells On piers Location Map with Facility infrastructure 3 Serving the Public Trust Since 1938
4 Serving the Public Trust Since 1938
Platform Holly History In 1964 and 1965, the CSLC issued PRC 3120 and PRC 3242 to Atlantic Richfield Company (ARCO), after competitive bidding. In 1966, Platform Holly was installed in 211 feet of water and production from the South Ellwood Field began using subsea pipelines and the Ellwood Onshore Facility (EOF). In 1993, Mobil Exploration and Producing, Inc. (Mobil) acquired both leases from ARCO. In 1997, Mobil assigned the leases, including Platform Holly, and other facilities (i.e., the PRC 3904.1 the Ellwood Marine Terminal (EMT) and the two oil piers at PRC 421 to Venoco, which has since operated the facilities. 5 Serving the Public Trust Since 1938
Platform Holly History Located ~1.5 miles offshore west of Goleta. Platform consists of 3 decks. 26 oil and gas & 4 disposal wells (Shut in since May 2015). Platform has four pipelines ( 6 oil emulsion, 6 gas, 2- 4 utility lines ). New 16.5 KV subsea power cable installed in 2013. 6 Serving the Public Trust Since 1938
Pier 421-2 Pier 421-1 7 Serving the Public Trust Since 1938
PRC 421 History PRC 421 was originally issued by State Surveyor General in 1929. The lease was extended and renewed by the State Lands Commission (Commission) on October 22, 1949. PRC 421 includes two piers and two wells (PRC 421-1 and PRC 421-2) Production from the lease was continuous until it was curtailed in May 1994 due to an onshore oil spill from a 6-inch flow line. PRC 421 remains shut-in. 8 Serving the Public Trust Since 1938
Events Leading Up to Decommissioning On May 19, 2015, the onshore underground pipeline (PAAPL Line 901) that transports oil produced from Platform Holly to market ruptured causing the Refugio Oil Spill. Line 901 remains shutdown with no specific date identified for resuming operation. There has been no production from Platform Holly since this event. On April 12, 2017, Venoco, LLC notified the Commission that it was no longer able to meet the lease terms and obligations for the South Ellwood Field leases, including Platform Holly and the Ellwood Beach Pier leases. On April 17, 2017, the Commission received documents from Venoco, LLC quitclaiming its interests in the South Ellwood Field leases, including Platform Holly and the Ellwood Beach pier leases offshore the City of Goleta. Later that day, Venoco again filed for bankruptcy (Case No: 17-10828) to liquidate its assets. 9 Serving the Public Trust Since 1938
Commission Actions Contemporaneous with Venoco s quitclaim, Commission staff negotiated a Temporary Reimbursement of Services Agreement to ensure that qualified Venoco operations staff remained on Platform Holly and the Ellwood Onshore Facility to maintain the safety of the operations. Commission staff is engaged in robust outreach with a variety of stakeholders including other state agencies, local municipal agencies, local and state lawmakers and concerned citizens affected by the current state of affairs. Commission staff published a Solicitation for Statements of Interest for an Offshore Oil & Gas Facilities Engineering consultant perform the engineering, operations and administrative services and hopes to have a contractor in place by the close of July 2017. Most recently, Commission staff, lead by our Executive Officer, Jennifer Lucchesi, held a town hall meeting in the City of Goleta to address concerns of the local citizenry. 10 Serving the Public Trust Since 1938
Decommissioning Process Phase 1: Phase 1: Ensure continuous staffing at Platform Holly and the EOF to provide Commission staff with time seek Requests for Proposals (RFPs) from qualified engineering outfits to plug and abandon (P&A) the wells on Platform Holly and PRC 421. This phase should be concluded by July 31, 2017. Phase 2: Phase 2: Once a contractor is selected, begin the P&A process on the 30 wells on Platform Holly and the 2 wells on PRC 421. This phase is expected to require roughly 20-36 months, depending on conditions. Once complete Platform Holly and PRC 421 will be rendered largely safe. Phase 3 Phase 3: The final decommissioning and removal of offshore infrastructure. The specifics for this phase have not yet been developed and is highly dependent on funding, but Commission staff anticipates beginning the development of the decommissioning plan in approximately 18 months from the beginning of the P&A process. 11 Serving the Public Trust Since 1938
Staff Recommendation(s) Based on a prior special meeting, Commission staff has acted, pursuant to Commission authorizations to ensure the health and safety of Platform Holly and associated facilities. In the spirit of transparency in this process, staff is seeking Commission confirmation of the following prior authorizations: 1) Authorize the Executive Officer, or her staff, to call on Venoco s bonds to ensure that the interests of the State of California are protected. 2) Authorize the Executive Officer, or her staff, to enter into all contracts and agreements and take any and all necessary or appropriate action on behalf of the Commission to ensure that the subject Leases [PRC 3120.1, PRC 3242.1, PRC 421.1] are safe and that all lease obligations are met. 12 Serving the Public Trust Since 1938
Thank You! For more information: www.slc.ca.gov Jeff Planck, Asst. Chief of the Mineral Resources Management Division jeff.planck@slc.ca.gov; 590-562-5306 Seth Blackmon, Senior Staff Counsel, Legal Division seth.blackmon@slc.ca.gov; 916-574-0393 For media Inquiries, please contact: Sheri Pemberton, Chief of External Affairs Division Sheri.pemberton@slc.ca.gov; 916-574-1992 13 Serving the Public Trust Since 1938
