Occidental cuts shipments after blaze at its oil field

Occidental Petroleum Corp. said it wouldn’t meet supply commitments to its customers after a fire that idled most output from its Elk Hills field near Bakersfield.

The Westwood-based company has called a force majeure, a provision declared when an event beyond a supplier’s control prevents it from meeting its contract obligations, spokeswoman Jan Sieving said Thursday. A natural-gas pipeline leak caused the fire Tuesday and led to the field’s shutdown.

There’s no time estimate for restarting production at the field, which normally has output equivalent to 120,000 barrels of oil a day, Occidental spokeswoman Susie Geiger said.

About 95% of output is shut down.

The fire, which injured four contract workers, was caused by a leak in a gas-gathering pipeline, Geiger said Wednesday. About 60% of Elk Hills’ output is oil.

Elk Hills is the seventh-largest oil field in the continental U.S., and it was unclear Thursday what the shutdown would mean to refinery operations in the Western U.S.

Occidental operates the field and owns a 78% interest.

The company acquired its stake in the field in February 1998 for about $3.5 billion from the U.S. government. Chevron Corp. owns the remaining 22%, Sieving said.

The shutdown of the field idled the 550-megawatt, gas-fueled Elk Hills power plant, which is jointly owned by Occidental and Sempra Energy, said Sempra spokesman Art Larson. The incident disrupted the supply of gas to the plant, which is in the middle of the Elk Hills field, he said.

Occidental shares rose 60 cents to $47.23.