Pacific Palisades : Pre-Payments Offered for Oil Lease Renewals

Occidental Petroleum Corp. is offering residents up to $500 as a “prepayment incentive” to renew their oil lease agreements, according to spokesman Howard Collins.

Robert H. Sulnick, president of No Oil Inc., said that the payments amount to “a bribe.”

Occidental is required to lease the oil rights of 75% of the land in the oil-drilling area as part of its controversial plan to drill at the base of the Palisades bluffs on Pacific Coast Highway.

“The fact that they are paying this much shows they are worried about their ability to get the 75%,” Sulnick said.

In the past, Collins said, Occidental has paid residents $10 each year to continue their leases with the company. This is the first time the payments have been made in advance, he said. The leases are mostly of 10-year duration, so the $500 is more than residents would have received under the old plan, he said.

He said the prepayment has enticed residents to renew their leases, but declined to say how many had done so.

Meanwhile, drilling opponents were celebrating a court ruling last week that lawyers said could invalidate the Los Angeles city ordinances authorizing the project.

Roger Jon Diamond, an attorney in a lawsuit challenging the project, called the ruling by Superior Court Judge Norman Epstein a “major victory” for residents and environmentalists. The ruling challenges the city’s environmental review of the project because it did not include the pipelines that would carry away the oil produced from the coastal drilling site, he said.

Occidental’s attorneys argued that the environmental study would have to wait until the pipeline route is determined, and that depends on which of three refineries is used. The choice of the refinery, in turn, depends on the composition of the oil that is obtained, they said.

A hearing is scheduled Nov. 4 in Los Angeles Superior Court.