Rincon

Photo of Rincon Operations courtesy Sheri Pemberton, Commission staff.

Jun 10, 2021 | Oil and Gas

Status

The Commission and its contractors have completed 100 percent of onshore abandonments (27 of 27 wells, including two additional Hobson Fee wells) and 100 percent of offshore abandonments (50 of 50 wells). Completion of all Phase 1 work, as described below, is expected before June 30, 2021.

Phases

Phase one is to plug and abandon the 77 wells on the former leases and perform ancillary work necessary to leave the site in a safe condition pending determination of final site disposition. This includes 27 onshore wells, 25 of which are state wells and two of which are known as the Hobson Fee wells. It also includes 50 island wells. As of December 2020, all production wells onshore and all offshore wells on Rincon Island were plugged and abandoned. Each well was plugged by clearing and cementing the well bore to the surface elevation, consistent with regulatory standards. After each onshore well was plugged, all well sites, including the cement well cellars and remnants, were cleared and restored to their natural condition, removing any visual trace of the well. This work, plugging wells first then restoring all well sites at once, reduced costs and minimized delay. All remaining work ancillary to plug and abandonment both onshore and offshore is anticipated to be completed by June 2021.

Phase two is to develop a decommissioning plan for the disposition of Rincon Island, the onshore facility, and the causeway. This includes a feasibility study and California Environmental Quality Act (CEQA) documentation.

In September 2020, the Commission released a solicitation for an environmental consultant to conduct a feasibility study and prepare California Environmental Quality Act (CEQA) documentation to evaluate decommissioning alternatives for the disposition of the island, onshore facility, and causeway. Eight highly qualified firms submitted responses. Staff interviewed the four most qualified candidates and selected a contractor. The phase two work will begin in the first quarter of 2021 and is anticipated to be completed in 2022. This process will include extensive public outreach and stakeholder engagement.

Phase three is to execute a decommissioning plan for the disposition of Rincon Island, the onshore facility, and the causeway. This phase, which will happen when phase two is complete, will require discretionary approval of the proposed decommissioning plan by the Commission, approvals by other governmental agencies, funding and hiring a decommissioning contractor.

Background

Until recently, there were three state oil and gas leases associated with Rincon Island, totaling 1,551 acres of tide and submerged lands in Ventura County (map). In 2014, staff identified regulatory violations that posed a significant risk to the marine environment from an uncontrolled release of oil. The Commission, in partnership with the Department of Conservation’s Division of Oil, Gas, and Geothermal Resources, vigorously advocated for the state’s interests before and after Rincon Island Limited Partnership (RILP) filed for bankruptcy in August 2016. On November 29, 2017, the Commission adopted findings and authorized staff to accept a voluntary relinquishment of RILP’s rights in the lease (known as a quitclaim deed) or terminate the leases. On November 30, 2017, the Bankruptcy Court approved a joint motion by the Commission, the chapter 11 trustee, and UBS AG Bank (RILP’s largest secured creditor) to grant the Commission a quitclaim over Rincon Island (Lease No. PRC 1466), which was on December 6, 2017.

The relinquishment means the last operational offshore oil drilling and production facility in the Santa Barbara Channel is over, and RILP’s interests will be added to California’s Coastal Sanctuary. The Commission is now, as it has been, working to ensure public and environmental safety and to protect the state’s public lands and resources.

Previous Staff Reports

  • 08/20/2020 (56) – Request authority for the Executive Officer to solicit statements of interest for consultant services, negotiate a fair and reasonable price, and award and execute agreements for a feasibility report and environmental documentation.
  • 02/27/2018 (92) – Request authority for the Executive Officer to enter into agreements for access and operations on the former Rincon leases.  An update on the Commission’s oil and gas decommissioning projects, including the Becker Well.
  • 11/29/2017 (71) – Consider the future disposition of oil and gas leases PRC 1466.1, PRC 410.1, and PRC 145.1, held by Rincon Island Limited Partnership, and proposals submitted on behalf of the bankruptcy estate of Rincon Island Limited Partnership for alternate operators to assume control of those leases.
  • 08/17/2017 (77) – An update on Rincon Island Limited Partnership’s operational compliance, chapter 11 bankruptcy proceedings, and a settlement between the Commission and Atlantic Richfield Company, a prior lessee.