The Department of Energy announced today that it has settled a longstanding dispute over equity rights to the Naval Petroleum Reserve-1 (commonly referred to as “Elk Hills”) located in Bakersfield, California. Under the agreement, Chevron U.S.A., Inc. has agreed to pay $108 million to the United States to resolve all outstanding equity claims.
From World War II to 1998, the United States and Chevron (along with its predecessor Standard Oil of California) operated their respective interests in the Elk Hills oil field as a single unit. The Department sold its interest in Elk Hills in 1998. However, an agreement between Chevron and the Department allowed for equity interests in the field to be redetermined after the sale, with a financial settlement to account for any retrospective changes to equity ownership. This settlement agreement concludes that equity redetermination process.