As hard as it may be for some in Texas to believe, California really does have an oil industry, as Occidental Petroleum’s announcement of a sizeable find northeast of Los Angeles shows.
Oxy believes there is “between 150 million and 250 million gross barrels of oil equivalent reserves” in the area. About two-thirds of the discovery is believed to be natural gas.
| The image many Californians have of oil exploration: the 1969 Santa Barbara spill.
“We believe this to be the largest new oil and gas discovery made in California in more than 35 years,” said Dr. Ray R. Irani, Chairman and Chief Executive Officer of Occidental Petroleum Corporation.
The oil industry’s history runs pretty deep in California, despite the impression some have that the state is loath to sully itself with such work. Many Texans may find Bakersfield, Calif., where the big find is located, surprisingly similar to parts of Texas. Heck, Buck Owens called the place home.
California was actually home to a busy offshore oil industry in the 1960s, but it was also the site of a major oil spill off Santa Barbara, which essentially put a damper on offshore E&P there for decades.
Houston-based Plains Exploration recently penned a deal to restart exploration work off Santa Barbara after making concessions to the local community, but that deal was blocked by state officials in January. Now the cash-strapped leaders in Sacramento are willing to open up to more drilling as a way to balance the budget.
As Bloomberg notes, Occidental has been acquiring leaseholds on privately held California land for the past five years in order to tap into reserves that were overlooked or dismissed by rival companies decades ago. So far the company has gathered about 1.1 million acres.