TITLE
Recommendation to authorize City Manager to execute the First Amendment to the Optimized Waterflood Program Agreement for the West Wilmington Oil Field between the City of Long Beach and Tidelands Oil Production Company to correct an oversight in the accounting language. (District 1)
DISCUSSION
Tidelands Oil Production Company (Tidelands OPC) entered into an Optimized Waterflood Program Agreement (OWPA) with the City of Long Beach (City) on January 1, 2010, for the interest held by the Port of Long Beach. The purpose of the OWPA is to provide financial incentive to Tidelands OPC to invest tens of millions of dollars of its own capital for further oil exploration and development in the field.
If costs of operations allocated to City exceed its share of revenues under the OWPA, such excess will be carried forward rather than City having to pay the excess costs to Tidelands OPC. The Amendment will revise Section 2.08 of the OWPA to reflect the foregoing. Since the execution of the OWPA, the Parties in actual practice have carried such excess costs forward. The Amendment will formally recognize the intent and past practice of the Parties under the OWPA.
This matter was reviewed by Deputy City Attorney Richard F. Anthony on May 6, 2013 and by Budget Management Officer Victoria Bell on May 3, 2013.
TIMING CONSIDERATIONS
City Council action on this matter is not time critical.
FISCAL IMPACT
There is no fiscal impact or local job impact associated with this action.
SUGGESTED ACTION
Approve recommendation.
Respectfully Submitted,
CHRISTOPHER J. GARNER
DIRECTOR OF LONG BEACH GAS AND OIL
APPROVED:
PATRICK H. WEST
CITY MANAGER