On February 5, 1998, the Department of Energy and Occidental Petroleum Corporation concluded the largest divestiture of federal property in the history of the U.S. government.
The sale agreement completed a privatization process that began in 1995 when the Clinton Administration proposed selling Elk Hills. The divestment removed the federal government out of the business of producing oil and gas at Elk Hills.
In May 1995 the Clinton Administration proposed placing the federally-owned Elk Hills Naval Petroleum Reserve on the market as part of its efforts to reduce the size of government and return inherently non-federal functions to the private sector. In February 1996, the Congress passed and the President signed the Defense Authorization Act for Fiscal Year 1996 containing authorization to proceed with the sale.