Companies sue US for blocking development of leases off California

HOUSTON, Jan. 10 -- Delta Petroleum Corp., Denver, and several other companies are suing the US government for more than $1.2 billion for preventing them from developing 40 federal leases off California.

The $1.2 billion would be recompense for leasing bonuses and rentals alone. The companies also plan to ask for reimbursement of exploration costs and related expenses. Delta did not name its co-plaintiffs, but Nuevo Energy Co. is one of the affected companies (OGJ Online, July 6, 2001).

The companies are alleging breach of contract, citing post-leasing amendments to a federal statute governing offshore activities that have been interpreted to alter the leaseholders' rights, said the company, adding the government has failed to carry out its obligations under the agreements.

The leases are in the Santa Maria basin off Santa Barbara and San Luis Obispo counties and in the Santa Barbara Channel off Santa Barbara and Ventura counties.

Various delays on the state and federal level, mostly fueled by public opposition, have kept the leases, sold in 1981-1985, from being developed:

-- In 1993, all of the leases were placed under a Directed Suspension of Operations by MMS, pending the completion of a joint federal, county, and industry study known as the California Offshore Oil and Gas Energy Report (COOGER).

-- COOGER, which assessed the onshore constraints to development of the 40 leases, was finished in 1999.

-- Last year, a federal judge ordered the US Minerals Management Service to certify to the California Coastal Commission that extensions of federal leases off Santa Barbara, Calif., are consistent with the state's Coastal Management plan.

At that time, Phillip Gobe, interim president and CEO of Nuevo, said, "As a matter of fact, the CCC concurred with the consistency of the exploration plans for these leases after they were issued between 1981 and 1985. By changing the rules governing these leases and by the actions of other federal, state, and local governments, the development of these offshore resources has been delayed for almost 20 years."

Delta said its share of the claim, directly and through subsidiary Amber Resources Co., is more than $152 million for the lease bonuses and rentals alone. Its claims for exploration costs and related expenses will also be "substantial."

In September, Delta said, "It has become increasingly apparent that environmental groups and most of the state of California -- politicians and constituents -- are adamantly opposed to new development off of their coastline."

It said that the California state senate had urged the President and Congress to negotiate repurchase of the leases. Although, said Delta, it would prefer to drill, it would accept a resolution of either sort.

Coastal Petroleum Co., a unit of Coastal Caribbean Oils & Minerals Ltd., is involved in a suit with some similarities against the state of Florida, saying that by denying it a drilling permit for its offshore properties the state is taking its property without compensation.

Related Articles

Eni takes exploration position offshore Portugal

Dec 23, 2014

Eni has agreed to take a 70% operated stake in permits offshore Portugal from Galp Energia subsidiary Petrogal.

African Petroleum nears farm-out offshore Liberia

Dec 23, 2014

An unnamed London-based independent has agreed to farm into 50% of African Petroleum’s LB-08 offshore license.

Orange-Nassau agrees to North Sea Sean farm-in

Dec 23, 2014

Shell has reportedly agreed to sell a 25% interest in the producing Sean field and adjacent exploration areas in the UK southern North Sea to Dutch independent Oranje-Nassau Energie (ONE).

Bright future ahead for UK offshore, says government adviser

Dec 22, 2014

Former Wood Group chairman Sir Ian Wood believes that the fortunes of the UK North Sea industry will improve by 2016.

Court rules against Transocean in Ireland rig costs dispute

Dec 22, 2014

Providence Resources confirms that a judgment was handed down by the Hon. Mr. Justice Popplewell on Friday, Dec. 19, in the Commercial Court in London concerning costs claimed by Transocean.

Trending News

Offshore photo of the day

Ezra, Chiyoba ink subsea MOU

Aug 28, 2015

Under a binding memorandum of understanding with Ezra Holdings Ltd., Chiyoda Corp. will invest in Ezra’s subsea services business, EMAS AMC, to form EMAS CHIYODA Subsea, a 50/50 joint venture.

Seadrill defers deliveries of newbuild rigs

Aug 28, 2015

Seadrill has issued an update on its rig building program and market prospects for drilling.

Iona negotiating farm-out of Orlando in North Sea

Aug 28, 2015

Iona Energy expects cost for the Orlando tieback to the Ninian Central platform in the UK northern North Sea during 2015-2016 to be reduced from $215 million to $192 million. 

Ikon Science, PetroTrace Global extend JV scope

Aug 27, 2015

Building on its joint venture with PetroTrace Global, Ikon Science now has the availability to process seismic data workflows using a new high performance computing cluster in its UK office.

  Offshore
Digital Magazine
Look Inside
Cover
Current Issue

Oil & Gas Jobs

Search More Job Listings >>