U.S. govt greenlights restart ops at oil-producing asset off California 18 months after major oil spill

U.S.-headquartered oil and gas company Amplify Energy Corp. has received the required approvals from federal regulatory agencies to restart operations at the Beta field located offshore Southern California in the Gulf of Santa Catalina.

Ellen and Elly offshore platforms near Long Beach, California; Credit: Bureau of Safety and Environmental Enforcement

This comes 18 months after a large oil spill damaged the Southern California Coastline by discharging around 25,000 gallons of crude oil into federal waters from the Elly platform’s pipeline, operated by Amplify’s wholly-owned subsidiaries – Beta Operating Co. LLC (Beta Offshore) and San Pedro Bay Pipeline Co. – off Huntington Beach.

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While announcing the approvals, Amplify Energy revealed on Monday, 10 April 2023, that the initial steps to resume full operations would involve filling the San Pedro Bay Pipeline with production. This process started over the past weekend and is expected to take approximately two weeks to complete. Following the line fill process, the company confirms that the pipeline will be operated in accordance with the restart procedures that were reviewed and approved by the Pipeline and Hazardous Materials Safety Administration (PHMSA).

Martyn Willsher, Amplify’s President and Chief Executive Officer, remarked: “Safety has driven every aspect of our response, repair and restart operations, and safety will continue to guide our operating philosophy as we bring the Beta asset back online. The approval from federal regulatory agencies and the receipt of $85 million in net proceeds from the vessels that struck and damaged our pipeline substantially concludes a very challenging last 18 months for the company, and we are eager to focus our attention on safely operating our Beta assets, our business as a whole and the strategic direction of the company.”

Regarding the vessel that Amplify Energy claims to have damaged the pipeline, MSC has been identified as the party of interest in the local investigation after its boxship MSC Danit dragged anchor near the underwater pipeline in January 2021. In addition, another container shipping vessel was identified to have dragged anchor during severe weather in the area at the time, COSCO Beijing, which is operated by Costamare Shipping.

Therefore, Amplify sued the two containership operators and Marine Exchange of Southern California claiming it failed to direct the ships to deeper waters and inform Amplify of the anchor-dragging incidents. Recently, the U.S. firm entered into another settlement agreement with MSC Mediterranean Shipping Company in connection with the 2021 Orange County pipeline oil spill. This came almost a month after the shipping company announced its acceptance of the initial settlement over the incident.

Amplify Energy’s oil-producing California properties, also known as the Beta properties, encompass two wellbore production platforms – dubbed Ellen and Eureka – and one production handling and processing platform – known as Elly – along with the San Pedro Bay Pipeline Company, which owns and operates a 16-inch diameter oil pipeline that extends approximately 17.5 miles from one of the Beta platforms to the Beta pump station located onshore at the Port of Long Beach, California, and an onshore tankage and metering facility.

“Amplify has operated off the coast of California for years in a safe and responsible manner, and we remain committed to ensuring the protection of our employees, the environment and our surrounding communities,” concluded Willsher.

The company highlights that its Beta properties contained 13.7 MMBbls of estimated net proved oil reserves as of 31 December 2022.