Chevron to Continue Fight for Point Arguello Project : Energy: Its chairman admits that court actions seeking to overturn the denial of a permit for its $2.5-billion facility could delay the project for years.

Chevron Corp. Chairman Kenneth T. Derr vowed Tuesday to fight Santa Barbara County’s denial Monday of a key permit for the $2.5-billion Point Arguello offshore project.

But he admitted that the long-stalled project could face years of delays.

Meanwhile, W. Henson Moore, the No. 2 official in the Energy Department, said Tuesday that the federal agency would continue to mediate the matter, despite the county’s rejection of the department’s 11th-hour compromise proposal.

“Last night was a setback, but it’s not the end of the issue,” Moore, deputy secretary of energy, said at a news conference here.

Derr, in town for the American Petroleum Institute’s annual meeting, said it was “a good possibility” that court actions to overturn the county’s denial could delay start-up of the Point Arguello project by years. But first, Chevron plans to appeal to the California Coastal Commission, a process that takes 49 days, he said.

In any case, Derr said, “I’ll never give up.

“How are you going to give up on the largest oil field found in the United States in the last 15 years?” asked Derr, whose company is the lead partner of 18 oil firms operating the project.

Point Arguello has sat idle for three years atop an oil reserve estimated at 250 million to 300 million barrels.

Moore said: “We’re trying to work very hard as an unofficial mediator between the operators involved on the oil company side and the Santa Barbara (Board of Supervisors). We think we’re going to continue to do that. We think we’ve developed a good rapport with both sides, and the object is to get the issue settled so that the oil can come ashore that the country needs.”

On Monday, Santa Barbara County supervisors rejected Chevron’s request for a permit to ship oil by tanker from Point Arguello, which remains the final obstacle to production of as much as 75,000 barrels of oil a day. Supervisors favored shipping the oil by pipeline, a more expensive but, they said, environmentally safer method.

Meanwhile, Moore said the world’s production of oil is actually 200,000 barrels a day higher than it was before Iraq invaded Kuwait on Aug. 2, because of stepped up production by other nations and falling demand.