Post on 17-Jan-2016
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ANNUAL AND PROGRAM PLANS BRIEFING
C109Long Beach Unit
April 2015
Marina Voskanian, P.E.California State Lands Commission
Mineral Resources Management Division
Productive Limit
Banning
POLA
Productive Limit
OxyBelmont
Thums Long Beach Co.
Tidelands Oil Production Co.
Long Beach Unit
PRC 186-Belmont
Tidelands
Wilmington Oil Field
Wilmington Oil Field discovered in 1932
Field is divided into two main parts:• West Wilmington • East Wilmington (Long Beach
Unit)
LBU development began in 1965
Currently:• City of Long Beach, the
Operator
• Thums Long Beach Company, a subsidiary of California Resources Corporation, the Contractor
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Chapter 138
Provided for the formation of the Long Beach Unit (LBU)
City of Long Beach, trustee of the granted lands and the Unit Operator
State retains a financial interest and reviews the Annual Plan and Program Plan
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Optimized Waterflood Program Agreement
1991 - Chapter 941. Legislation authorizing profit sharing with City and Contractor
1992 - “Optimized Waterflood Program Agreement” (OWPA), implemented.
Incremental Profit Sharing:• 49% to Contactor • 42.5% to the State • 8.5% to the City
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Long Beach Unit55
Long Beach Tidelands
Long Beach Unit Statistics (2013/14)
DescriptionsLong Beach
Unit
Total Active Number of Wells 1,486
Average Daily Oil Production (Barrels) 24,848
State Share of Net Profit ($Million) 292.4
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Historical Revenue to State
Since its inception the LBU operations have yielded approximately $6 billion in net profits revenue to the State of California.
LBU Revenue:(FY 2013/14)
• State: $ 292 Million• CRC: $ 149 Million• City: $ 22
Million
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Every Other Year Review the 5-year Program Plan to ensure:
• It is consistent with good oil field practice • It is consistent with the Unit & Unit Operating Agreements• Does not involve significant safety or environmental risks
Every Year Review the coming year plan and budget for consistency with
the 5-year Program Plan Approve costs related to subsidence studies
Every 6-months Receive update on subsidence surveys
Long Beach Unit – Commission Actions
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Long Beach Unit Safety Audit 2012 – 2013
4 Islands + 3 Onshore Facilities
Urban Setting & Major Commercial Port
Safety Audits in 2002 & 2012• All Action Items resolved
• Safety Assessment of Management Programs also completed
• Safety Audit Report from 2012 available on website
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Safety Audit Observations
Human and Organizational Factor Improvements
• Safety and environmental programs are well established
• Operating procedures & Operations Manual are followed
• Responsible operating practices are utilized
• Employees exhibit plant ownership, teamwork, and
responsibility for the environment.
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Safety Audit Comparison2002 & 2012
Action Items in 2002:
• 198 Priority One Action Items
• 3197 Action Items identified
• All Action Items resolved
Action Items in 2012-13:
• 2 Priority One Items (98% improvement)
• 1506 total Action Items (53%
improvement)
• All Action Items quickly resolved
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CSLC Staff Involvement in LBU12
Participate in Monthly Engineering Committee Meetings
Reservoir Management Consultation, With the City & CRC
Analysis of Drilling Safeguards Involving Blowout Prevention Equipment Certification
Oil Spill Prevention Exercises
Onsite Inspector Presence in the Field
Conduct Safety and Oil Spill Prevention Audit
Subsidence Monitoring and Prevention
Monitor Production and Financial Information
Financial Audit
Long Beach Unit- Program Plan2015 through 2020
Budgeted expenditure during 5 years estimated $1,769.5 million
City projected Unit net income during 5 years at $304.1 million
City’s projected oil price varying from $45 to $60 per Barrel
Production forecasted varying from 21,900 to 18,700 BOPD
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Long Beach Unit - Annual PlanJuly 1, 2015 through June 30, 2016
Budgeted expenditure estimated $325.2 million
City projected Unit net income at $45.8 million
City’s projected oil price of $45 per Barrel
Production forecasted to average 21,856 BOPD
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Staff Recommendation
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Commission Staff has Reviewed Proposed Plans and Finds:
Program & Annual Plan Expenditures meet objectives of LBU &
OWPA
Program Plan is Consistent with Good Oilfield Practice
Program Plan is Consistent with OWPA, Unit Agreement, and Unit
Operating Agreement
Annual Plan is Consistent with Program Plan
Contractor adheres to industry codes, State oil and gas safety and
environmental regulations
Commission staff recommends the Commission accept the Long Beach Unit July 1, 2015 – June 30, 2020 Program Plan and July 1, 2015 – June 30, 2016 Annual Plan as submitted
Long Beach UnitProgram Plan Review Process
Each Program Plan shall be submitted to SLC at least 100 days prior to expiration of the current Program Plan
SLC has a period of 45 days following submission to complete its review of the Program Plan
If SLC does not order any changes within 45 days, the Plan is deemed to be reviewed & accepted by SLC
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Facility Safety Audit Analysis 1818
On-site verification of Piping and Instrumentation Drawing (P&ID) accuracy
Assess condition of platform or facility and adequacy of maintenance
Check for compliance with other safety and environmental requirements
Determine serviceability of Tanks and Pressure Vessels
Check design of safety systems for compliance with MRMD regulations and
other codes
Use third party electrical contractor to validate design of electrical system
and assess condition
Verify oil spill prevention features and equipment are in use and check
response equipment
Evaluate Safety Management Practices
Provide report, action item list, and monitor resolution of action items
LBU Safety Audit Activities
Key Safety Audit Activities:
Comprehensive facility condition surveys at• Islands White, Chaffee, Grissom, Freeman• Pier J-2 Production Facility• Broadway Mitchell Gas Processing Facility• Onshore Well Areas and J-6 Tank Farm
• Design review and safety system analysis• Compliance check – regulations / rules / standards• Review modifications to the 50 year old facilities
Human Factors Activities:• Safety Management Programs and practices• Assessment of Safety Culture
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LBU Financial Performance Largest Source of Income to CSLC
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*Administrative Overhead Revenue to CRC and City of Long Beach not included
Field Development
Oil production peaked at 148,495 barrels per day in August 1969 before beginning a rapid decline.
During 1982 to 1986, a redevelopment program was undertaken.
In 1990, ARCO Long Beach, Inc. (ALBI: Contactor for the City), approached the City and State with a proposal to fund and implement a program to optimize waterflood operations in exchange for a share of the incremental tidelands revenue.
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