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

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.

Premier sells stakes in four North Sea fields

Dec 22, 2014

Premier Oil has completed two asset transactions in the North Sea with a combined cash consideration of $147.5 million. 

NZOG takes stake in Cue Energy

Dec 22, 2014

New Zealand Oil & Gas (NZOG) has agreed to acquire 19.99% of the shares in Cue Energy from Todd Petroleum Mining for $11.37 million.

Gazprom entry to North Sea shelved

Dec 19, 2014

BASF and Gazprom have cancelled a planned asset swap in Europe, which was due to go through at the end of the year.

Trending News

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.

Statoil proves small oil accumulation near Oseberg

Dec 22, 2014

Statoil has found oil with its latest wildcat in the Oseberg area of the Norwegian North Sea, according to the Norwegian Petroleum Directorate (NPD).

MAN compression modules fitted to Petrobras floater

Dec 22, 2014

MAN Diesel & Turbo has supplied two high-pressure compression modules to MODEC for Petrobras’ FPSO Cidade de Mangaratiba in the Santos basin offshore Brazil.

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.

Premier sells stakes in four North Sea fields

Dec 22, 2014

Premier Oil has completed two asset transactions in the North Sea with a combined cash consideration of $147.5 million. 

  Offshore
Digital Magazine
Look Inside
Cover
Current Issue

Oil & Gas Jobs

Search More Job Listings >>