The State Lands Commission terminated three offshore oil and gas leases and a pipeline right of way lease

Jun 28, 2019 | Oil and Gas, Press Release

Sacramento, CA –The State Lands Commission terminated three offshore oil and gas leases and a pipeline right of way lease today.

Over the past few years, the Commission has sought to compel Carone Petroleum Corporation and Signal Hill Services Inc., state lessees, to pay rent and maintain a sufficient bond for their respective leases. The failure to bring their rent current or to provide sufficient bonding resulted in today’s termination action.

“The State Lands Commission’s primary responsibility is to protect the public’s interest in over 5 million acres of state lands. Today’s action affirms that the Commission will always hold lessees accountable to the required standards of lease agreements, particularly when it comes to offshore oil drilling,” said Lieutenant Governor and Commission Chair Eleni Kounalakis.

The oil and gas leases, located offshore Carpinteria in Santa Barbara County, have not been in production since 1992 and with their termination almost 4000 acres of tide and submerged lands are returned to California’s Coastal Sanctuary. The oil and gas leases have no infrastructure on state land to remove. The pipelines within the right of way lease were operational and transported hydrocarbons and produced water from Platform Hogan in federal waters to shore.

The Commission consulted with the Bureau of Safety and Environmental Enforcement before terminating the leases. Carone has two federal leases and had once planned to use Platform Hogan, located in federal waters offshore Santa Barbara, to drill oil from its state leases.

“These lease terminations demonstrate the Commission’s steadfast commitment to protecting natural resources and public lands. We will continue to ensure lessees uphold their obligations to the people of California,” said State Controller and Commissioner Betty T. Yee.

The Commission appreciates the impacted employees integrity, commitment to safety and environmental protection, and professionalism. Today’s actions are solely a result of Carone Petroleum Corporation and Signal Hill Services, Inc. failure to comply with their lease obligations. Staff reports related to the Commission’s actions, agenda items 98 and 99, are here.