Firm Seeking to Extract Oil in Torrance a Mystery to City
Kelt Energy Inc., the company that wants approval to extract oil from under homes and businesses in a 560-acre area of southeast Torrance, remains a mystery to city officials.
That’s true even though the Torrance City Council voted 6 to 0 Tuesday night to approve an environmental impact report on Kelt’s plan to pump 27 million barrels of oil out of a southeast Torrance oil field over a 30-year period.
It’s not that city officials have not asked for information on Kelt. They have, but all they have received are indications that it has ties to French and British concerns.
‘Do Not Know Details’
Peter Lacombe, a prominent Torrance attorney who has represented Kelt in its dealings with the city, insists that he does not know exactly who owns the company.
“I do not know the details,” Lacombe said in an interview.
City Atty. Stanley Remelmeyer wants to know who Torrance is dealing with. “You’d like to know who it is that’s running the show,” Remelmeyer said. “We’ve got to know who the applicant is. We would like to know the track record of what they’ve done before and their character as a company,” he said. “We would really like to know if we are dealing with a reputable company.”
Approval of the environmental document does not constitute approval of Kelt’s project. The company still must win city approval for the actual drilling plan, which involves the injection of water to force out the oil remaining in fields already tapped by normal methods.
Remelmeyer said that approval will not come unless the city learns exactly who Kelt is.
Little Information
A written request to Kelt from Torrance Planning Director David Ferren so far has produced little information. The city asked for detailed answers to a series of questions about the corporate structure of Kelt Energy, its shareholders, any parent company, U.S. and foreign headquarters, resources and financial statements and its insurance coverage.
Although the city received a two-page letter from Kelt just hours before the council meeting, Remelmeyer said he does not consider it “descriptive enough.”
Remelmeyer said he was told by Lacombe that Kelt is undergoing a restructuring and a possible merger. Lacombe said the information the city wants will be provided but he did not know when.
“It is coming,” he said. “There is no doubt about it.”
Kelt’s Pacific Division Manager, Gregg Martin, one of two company officials at the council meeting, told reporters that Kelt Energy is the U.S. branch of a United Kingdom company of the same name.
A state Division of Oil and Gas report presented at the meeting, however, says Kelt Energy is owned in part by a French company known as the Perrodo Group.
In response to questions, Martin said a Frenchman, Hubert Perrodo, is “a gentleman who is the head of a drilling company that basically started up (Kelt).”
No More Facts
He declined to offer additional details. “I’m really not at liberty to go into that right now,” Martin said.
In his letter to the city, Martin said Kelt is undergoing “internal reorganization,” adding:
“Kelt Energy Inc. will become a 100% subsidiary of Kelt Oil PLC, a . . . public company listed on the London Stock Exchange.”
Martin said in the letter that Kelt Energy, through local subsidiaries, owns and operates onshore properties in the United Kingdom and offshore properties in the North Sea and Irish Sea and off West Africa.
In addition, he said, Kelt Energy has operations in Texas, New Mexico, Kansas and the Fresno area. Total daily production averages 2,250 barrels of oil a day and 5 million cubic feet of natural gas.
The southeast Torrance project would produce in excess of 3,000 barrels a day, Martin said. Currently, the company is producing 30 barrels a day at four wells in the area.
108 Wells
Kelt wants to drill 108 wells from a vacant site at Sepulveda Boulevard and Border Avenue in Torrance. Two-thirds of the wells would pump oil from a field 3,500 to 3,800 feet beneath the surface. The other third would inject water into the oil field to help push the remaining oil up.
Martin noted that there are other so-called “waterflood” projects under way in Torrance and other areas of Los Angeles and Orange County. A massive waterflood project in Huntington Beach “makes this look like peanuts,” he said.
After reviewing Kelt’s proposed project, the state Division of Oil and Gas concluded that “the proposed waterflood project is sound,” according to the report presented at the meeting.
“As long as the applicant complies with all of the specified state and local government conditions and regulations, we believe this project will not pose a danger to life, health, property, or natural resources and, in fact, will permit the wise development of a petroleum resource,” the division said.
Marjorie Maxwell, a resident of the area, expressed concern about the presence of flammable materials in tanks and pipelines and potential hazards in a major earthquake.
Martin attempted to reassure Maxwell and the council that there would be “no buildup of a major quantity of oil and gas” because the oil would be continuously shipped by pipeline to refineries in the area.
In previous public hearings, neighborhood residents have expressed concern that the drilling project could put additional pressure on abandoned oil wells, including some located beneath homes. But Kelt representatives said relief wells will be drilled to allow pressure to escape.
