TITLE
Recommendation to approve the Modification and Supplement of the Long Beach Unit Annual Plan (July 1, 2021 to June 30, 2022). (Citywide)
DISCUSSION
In accordance with Chapter 138, California Legislature, 1964 First Extraordinary Session, an Annual Plan of Development and Operations and Budget for the Long Beach Unit (LBU) must be adopted by the City of Long Beach (City) and approved by the State Lands Commission (SLC).
Chapter 941, California Legislature, 1991 Sessions, amended Chapter 138 and requires the City and the Contractor, California Resources Corporation, Inc., to prepare a one-year plan (Annual Plan), which includes an itemized budget of intended expenditures.
The Annual Plan covering the period of July 1, 2021 through June 30, 2022 was adopted by the City Council on March 23, 2021 and approved by the SLC on April 27, 2021.
In accordance with the provision of Section 2.06 of the Optimized Waterflood Program Agreement (Agreement) and provisions of Part IV, Sections A and B of the Annual Plan, we are submitting the First Modification and Supplement of the Annual Plan covering the period of July 1, 2021 through June 30, 2022. The modification and the supplement are required to account for an increase in the Facilities & Maintenance category of the Annual Plan. An increased level of facilities capital spending is projected for the period due to higher oil prices. The Agreement dictates that no such expenditure shall be incurred that would result in any category of expenditures to exceed the budget. Expenditures are anticipated to be higher than budget, however, will be offset by higher net profits. The requested supplement is wholly funded out of LBU operating profits.
This matter was reviewed by Deputy City Attorney Richard F. Anthony on February 22, 2022 and by Revenue Management Officer Geraldine Alejo on March 4, 2022.
TIMING CONSIDERATIONS
Chapter 941, California Legislature, 1991 Sessions, requires that any modification is subject t...
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