TITLE
Recommendation to approve both the Long Beach Unit: Annual Plan (July 1, 2011 - June 30, 2012) and the Program Plan (July 1, 2011 - June 30, 2016) in the amounts of $377,600,000 and $1,915,200,000, respectively. (Citywide)
DISCUSSION
In accordance with State law, an Annual Plan and Program Plan (a five-year plan of development that is replaced every two years) for the Long Beach Unit (LBU), Wilmington Oil Field must be approved by the City of Long Beach (City) and approved by the California State Lands Commission (SLC).
The Annual Plan and Program Plan (Plans) provide for continued development of the LBU and are a joint effort by the staffs of the Long Beach Gas and Oil Department, Occidental Long Beach, Inc., and Thums Long Beach Company. Copies of the Plans are attached.
The Plans assume an average oil price of $45 per barrel and an average gas price of $4.50 per thousand cubic feet. The total net income from the LBU is estimated to be $188,500,000 in the Program Plan and $51,700,000 in the Fiscal Year 2011-2012 Annual Plan. Expenses are estimated to total $377,600,000 and $1,915,200,000 for the Annual Plan and Program Plan, respectively.
This item was reviewed by Deputy City Attorney Richard F. Anthony and Budget Management Officer Victoria Bell on February 14, 2011.
TIMING CONSIDERATIONS
As required by State law, the City must submit formal copies of the Plans to the SLC for approval not later than March 22, 2011. To meet that requirement, City Council approval is requested on March 8, 2011.
FISCAL IMPACT
The Long Beach Unit oil operations will generate an estimated income to the City in the amounts of $1,500,000 for the Tidelands Operating Fund (TF 401) and $3,700,000 to the General Fund over the Annual Plan period. The Program Plan, over the five-year plan period, will generate an estimated income to the City in the amounts of $6,700,000 for the Tidelands Operating Fund (TF 401) and $18,300,000 for the General Fund.
These amounts represent ongoing revenue streams to both the Tidelands Operating and General Funds that have been included in the FY 11 budget and will be included in the FY 12 budget.
SUGGESTED ACTION
Approve recommendation.
Respectfully Submitted,
CHRISTOPHER J. GARNER
DIRECTOR OF LONG BEACH GAS AND OIL
APPROVED:
PATRICK H. WEST
CITY MANAGER