FROM: James D. Herberg, General Manager
Originator: Kathy Millea, Director of Engineering
SUBJECT:
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ASSIGNMENT, WELL TRANSFER, AND OPERATORSHIP AGREEMENT WITH CHEVRON U.S.A. INC.
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GENERAL MANAGER'S RECOMMENDATION
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RECOMMENDATION:
Approve the Assignment, Well Transfer, and Operatorship Agreement between the Orange County Sanitation District and Chevron U.S.A. Inc. to accept the assignment of the NC-79 well located at Plant No. 2, API # 05921580, along with the related rights and obligations.
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BACKGROUND
In the past, the current site of Plant No. 2 in the city of Huntington Beach was used for oil wells. A-Side Primary Clarifiers Replacement at Plant No. 2, Project No. P2-98A, will be constructed on top of an old oil well. In order to properly abandon the oil well and build a new structure above it, the Orange County Sanitation District (OC San) must be registered as both the owner and operator.
RELEVANT STANDARDS
* Maintain collaborative and cooperative relationships with regulators, stakeholders, and neighboring communities
* Protect OC San assets
PROBLEM
Records indicate that an oil well, designated as NC-79, is located under the Project P2-98A construction site. Per state records, Chevron U.S.A. Inc. has operatorship rights of NC-79, even though OC San owns this oil well. The state will not issue OC San a permit until it is registered as both the owner and operator of the well.
PROPOSED SOLUTION
Approve the Assignment, Well Transfer, and Operatorship agreement with Chevron U.S.A. Inc. along with the related rights and obligations. This agreement requires no payment by either party.
TIMING CONCERNS
A-Side Primary Clarifiers Replacement at Plant No. 2, Project No. P2-98A construction is anticipated to begin in June 2021. Construction of the clarifiers could be delayed if an oil well abandonment permit is not obtained.
RAMIFICATIONS OF NOT TAKING ACTION
Without approval of this agreement, the required per...
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