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To: sandintoes who wrote (1067)	10/16/2000 8:59:07 PM
From: KLP	Read Replies (1) \| Respond to of 1719

R and All~While this is news of 2 years ago, think it is more important even today....especially when you see the next one I'm sending... DOE to sell Elk Hills for $3.65 billion enn.com The Department of Energy is prepared to sell the United States' interest in a petroleum reserve it no longer needs for $3.65 billion in cash, making it the largest privatization in the history of the U.S. government. DOE is selling its interest in the Naval Petroleum Reserve No. 1, known as Elk Hills, to Occidental Petroleum Corp. "We're getting maximum value for this asset, and we're turning one of the nation's premier oil and gas fields over to the private sector -- to a respected and experienced U.S. oil and gas producer," said DOE Assistant Secretary Patricia Fry Godley, who has been overseeing the sales process. "The Navy no longer needs Elk Hills, and this sale helps get the government out of the oil and gas business." The Elk Hills field is located near Bakersfield, Calif. The property encompasses more than 47,000 acres and includes significant oil and gas reserves, more than 1,000 producing wells, a 47-megawatt electricity-generating facility and two large gas plants. Current daily production from the field is approximately 60,000 barrels of oil and almost 400 million cubic feet of natural gas. The sale to Occidental will complete a two-year privatization process mandated by Congress in the 1996 National Defense Authorization Act. Closing of the transaction is subject to various governmental reviews and is expected to occur by Feb. 10, 1998. DOE received a total of 22 bona fide offers from 15 parties acting alone or in concert. "The sales strategy was designed to maximize competition and to allow all qualified bidders to compete on an equitable basis," Godley said. "I am pleased to report that the process worked." Occidental won the bidding and will acquire 100 percent of the United States' interest to become the new operator at Elk Hills. Elk Hills is one of the 11 largest oil and natural gas fields in the lower 48 States. Originally set aside in the early 1900s to ensure a future source of crude oil for the U.S. Navy, the field no longer serves a national security purpose since the country's emergency oil supplies are now held in the Strategic Petroleum Reserve. Elk Hills has been in commercial production since Congress authorized its development in 1976. It reached peak production of 181,000 barrels of oil per day in 1981. President Clinton included the sale of the Elk Hills Naval Petroleum Reserve in his 1996 budget proposal as part of an effort to remove the Federal government from non-Federal functions. For more information, contact Bill Wicker, DOE, (202)586-5827. Copyright 1997, Environmental News Network, All Rights Reserved ENN Daily News -- October 9, 1997