California | March 2020
Field Overview
Current Brent crude prices are $33.31/bbl. California, with both onshore and offshore oil production, has been supplying the U.S. with petroleum products since the 19th century. Operations are primarily focused around Kern County, the LA Basin, and the San Joaquin Valley, with the Midway-Sunset oil field in Kern County being the state’s largest.
State Drilling Statistics
Total Rigs in California- 10
Total Rigs in United States- 664
Total U.S. Rigs down 35.2% YTD
Financial & Economic Updates
A Wave Of Downgrades Has Hit The U.S. Oil Patch
- The riskier end of the energy bond market has lately suffered a sharp blow in response to an epic oil price crash as the coronavirus pandemic and oil price war pushed bonds of oil and gas producers into distressed territory.
- According to a recent Financial Times article, nearly $110 billion of U.S. energy bonds have lately fallen into distressed status, working out to almost 12 percent of the $936 billion in energy junk bonds.
State Highlights
California Oil Industry Facing Disaster Due to Coronavirus, Oil War Threats
- Oil rich areas in California such as Kern County and Los Angeles County, along with in-state oil and gasoline companies such as Chevron, are facing a more and more likely industry collapse in the next several weeks due to both national and and international pressures.
- For several months the oil industry had been facing greater uncertainty due to a possible US recession and greater fluctuations in oil prices. However, when coronavirus hit earlier this year a sudden drop in oil usage due to reduced worldwide air travel and a reduction in Chinese usage due to quarantine measures began severely lowering prices worldwide.
- Critics also noted that, even if California’s oil industry stabilized, it will still face threats within the state. One Assembly Bill currently on pause because of the Legislature coronavirus shutdown, is set to cause disruptions for the industry.
Plains All American to Pay $60M for 2015 California Oil Leak
- Plains All American Pipeline LP and an affiliate agreed to pay $60 million in a court settlement for allegedly violating federal pipeline safety laws and liability for the 2015 pipeline leak of 2,934 bbl of crude oil that fouled Southern California beaches in Santa Barbara County.
Refining
California Gas Production
California Oil Production
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