Mobil rebuffed in extended reach drilling project
Oil and Gas Journal v93, n27 (July 3, 1995):30 (2 pages).
COPYRIGHT PennWell Publishing Company 1995
(reproduced here under `fair use' for teaching purposes)
Mobil Exploration & Producing Inc. has received a surprise setback in
its proposed $1.8 billion project to tap off-shore oil with extended reach
wells from an onshore site in Santa Barbara County, Calif.
The University of California at Santa Barbara (UCSB) late last month
rejected Mobil's plan to set up drilling operations on the company's 17
acre site near proposed university housing.
Mobil's Clearview project calls for developing the Coal Oil Point
extension of South Ellwood oil field in the Santa Barbara Channel with
extended reach wells from the onshore site.
UCSB's move may stymie other efforts to reopen state waters to oil
and gas development. That's because the project is considered a model for
dealing with strong local opposition to off-shore oil and gas platforms.
Santa Barbara independent Molino Energy also has proposed an extended
reach project to tap offshore hydrocarbons from an onshore site (OGJ, Oct.
17, 1994, p. 46).
Mobil said UCSB's decision took the company by surprise, calling it
"astounding...because information from UCSB was to wait until the
environmental impact report (EIR) was finished."
But UCSB decided it had enough information without an EIR, said
Robert Kuntz, assistant chancellor.
"In our judgment, the proposed Clearview project is incompatible with
surrounding land uses, both current and proposed," he wrote in a rejection
letter to Mobil, the Santa Barbara County Board of Supervisors, university
regents, and state officials.
In what UCSB Chancellor Henry Yang termed a consensus decision, a
university task force said allowing an industrial facility near its
planned 400 unit faculty/student housing project posed a safety hazard and
could "devastate" recruiting efforts because faculty housing would be less
attractive if located near an oil facility.
Mobil said it is not giving up the project. It has other--if less
attractive and more expensive---options.
These include drilling from another onshore site to be determined or
expanding Platform Holly, which is developing the 50 million bbl of oil
reserves originally contained in the western portion of South Ellwood
field (see map, OGJ, July 5, 1993, p. 20).
At stake is more than 100 million bbl of oil in state waters off Coal
Oil Point near UCSB that Holly was not designed to reach.
ARCO tried to develop Coal Oil Point extension with two proposed
platforms in the early 1980s. It gave up when the state and county
rejected the project in 1987, essentially objecting to the sight of more
platforms on the horizon. ARCO then quitclaimed the two Coal Oil Point
leases, PRC 308.1 and 309.1, to the state.
California State Lands Commission staff in 1993 suggested the leases
could be developed via extended reach wells from shore.
Mobil took up the idea, in 1993 acquiring ARCO's interests in
Platform Holly and its related leases 3120, 3242, and 421, the nearby
Ellwood processing plant and marine terminal, and an underwater oil/gas
seep containment structure.
Mobil proposed early dismantling of Platform Holly in exchange for
developing the quitclaimed leases via a safer, onshore drillsite. Extended
reach wells from that site would tap reserves 3 miles offshore and as much
as 10,000 ft below the seabed.
Mobil said the Coal Oil Point reserves could be reached from Holly by
expanding platform capacity and adding well slots. But that would not have
the environmental benefits of the Clearview proposal.
"We still think it's a great project, and we're hoping to find some
good alternatives," Mobil told OGJ.
Total original proved reserves of South Ellwood field, including the
Coal Oil Point extension, are an estimated 155 million bbl of oil and 150
bcf of gas. Only one third of that can presently be reached by Holly.
In other developments related to Mobil's Clearview project:
- An environmental coalition will continue with plans for an
initiative proposal that would give final authority to voters instead of
county supervisors (OGJ, June 26, Newsletter). "Threats to our coast still
abound, and there are all sorts of other options for Mobil," said Greg
Helms of the Santa Barbara Environmental Defense Center.
- Mobil still plans to buy a golf course that was intended to act as
a buffer between onshore Clearview facilities and UCSB's proposed housing.
Mobil said that could be used as a drillsite, but it also would entail
permission from USCB to drill under its property.
- Santa Barbara County canceled a June 26 hearing on rezoning the
Clearview property from residential to industrial due to UCSB's decision
- Mobil's operations on the UCSB property, mainly oil storage, will
not be affected until its lease expires in 2016. The related Ellwood oil
processing plant 2 1/2 miles away is designed to process as much as 20,000
b/d but is limited to 13,000 b/d because of air quality constraints.
Current South Ellwood production via Holly is about 5,000 b/d.