A City Council beset by funding woes has turned its eyes toward the handful of city-operated oil wells for some relief.
According to the city, new oil extraction techniques are required and officials are looking to partner with a company or consultant to find a way to increase production.
New wells may be drilled since the city charter that restricted this expired in January of last year. Or the wells may be reconditioned or converted into water injection wells. Alternative extraction techniques that are also being explored, according to the contract, include electric submersible pump, progressive cavity pumping, or gas lift technologies.
The council had already approved a $160,000 contract with Netherland, Sewell & Associates, Inc., in October for their services to review, evaluate and possibly modify the city’s oil field operation for potential production improvements.
The consultant’s report is due by the end of this month.
The city’s current 16 oil wells were slant drilled in unincorporated areas on PCH between 1953 and 1958, one is being used for water injection to increase productivity of the other wells and is non-operational. They are drilled into the Newport Offshore Oil Field.
According to the city website, oil production has declined since the 1980s. More recently, “the city has been averaging approximately $1.5 to $1.8 million in oil and gas revenue a year.”
Councilman Mike Henn brought this issue up last year.
“We’d like to find a way … to re-establish a better production capability out of our oil fields,” to fund the “huge needs” for improvements in the tidelands, Henn said
Revenue from the oil fields goes into the tidelands funds and may be used for “expenditures that support and maintain the tidelands, such as improvements to tidelands property including dredging Lower Newport Bay, lifeguards, beach cleaning, etc.”