Chevron Sells Oil Field to Plains Resources

Chevron Corp., the nation’s fourth-largest oil company, sold the last of its production assets along the California coast to Plains Resources Inc. for an undisclosed price. Plains acquired San Francisco-based Chevron’s 26% stake in the Point Arguello field off Santa Barbara and a nearby oil processing plant and pipeline network. Although the waters off California are thought to hold plentiful reserves, environmental concerns and political pressures have discouraged drilling. Chevron, which had production operations offshore for 41 years, is shifting its focus to exploration projects in other countries. Point Arguello was discovered in 1981 and production began 10 years later, peaking in 1993 at 80,000 barrels a day. Since then, output has steadily declined--to about 20,000 barrels a day over the last year--and the project has been plagued by high operating costs. Houston-based Plains, which had 1998 sales of $1.2 billion, buys older producing fields, typically from larger oil companies, then tries to boost production and lower costs. In 1992 and 1996, Plains acquired oil properties from Chevron in the Los Angeles basin. The properties bought in 1992 were thought to hold about 17 million barrels, but Plains has boosted proven reserves there to about 77 million barrels, a Plains spokesman said. Chevron had agreed to sell its stake in the Point Arguello field in November to closely held Venoco Inc., but the transaction fell through. Chevron closed down 19 cents at $96.25 on the New York Stock Exchange, while Plains rose 25 cents to close at $19.50 on the American Stock Exchange.