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Mobil Acquires Off-Shore Crude Oil Facility : Energy: Arco also transfers interest in related barge-loading operation off Santa Barbara coast; production hike planned.

April 09, 1993|MICHAEL PARRISH | TIMES STAFF WRITER

Mobil Oil Corp. has acquired full ownership of a crude oil production facility off the Santa Barbara County coast and plans to sharply increase production at the site.

Mobil and Atlantic Richfield Co. jointly announced Thursday that Arco had transferred its half interest in Platform Holly and 100% interest in a related barge-loading facility to Mobil.

Financial terms of the deal, effective April 1, were not disclosed.

The change marks an end to 27 years of oil and gas development efforts by Arco in the Santa Barbara Channel and a step forward in Mobil's plan to increase production in the area.

Mobil hopes to eventually boost production from the current 4,600 barrels a day to as much as 40,000 barrels a day. More than 3.5 million cubic feet of natural gas are also produced from the Platform Holly wells.

Crude from the platform is now piped onshore for preliminary processing then back to an offshore barge-loading terminal. One barge carries the crude oil south to Los Angeles every week to 10 days, a Mobil spokesman said.

The State Lands Commission has proposed that Mobil scrap the offshore platform and loading terminal and drill new wells into the oil reserves from on shore.

Mobil has expertise in a technology known as slant-drilling that has become commonplace in oil fields in recent years. This allows wellheads to be located onshore but to extend horizontally as much as four miles away--in this case, underneath coastal tidelands.

Mobil has proposed switching to a slant-drilled system as well. But whether or not Mobil drills from shore, it wants to greatly increase the number of wells and its production. In Mobil's slant-well proposal, the state and county could receive royalties of $600 million to $800 million over the estimated 20-year life of the oil field, at the 40,000-barrel-a-day production rate.

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