Corporate bankruptcy means oil platform off the coast of California will be torn down. Photo courtesy of the Environmental Defense Center.
April 18 (UPI) -- The pending closure of an oil installation offshore California because of a corporate bankruptcy marks a shift in state trajectory, environmentalists said.
Venoco, which has its headquarters in Colorado, said it filed for Chapter 11 bankruptcy and would dispose of its assets as a result. The company will quit-claim its lease for the offshore South Ellwood field back to the state and now starts the decommissioning of its offshore Holly platform and associated infrastructure onshore.
Venoco Chief Operating Officer Mike Wracher said there was a steady string of circumstances that led to the financial constraints that necessitated bankruptcy, including the ongoing closure of Line 901 in California.
"We have pursued a number of market-based and regulatory solutions to address these challenges during the last year," he said in a statement. "Despite these considerable efforts, our financial position now compels us to take this action."
A 2015 rupture on the 901 pipeline system, operated by Plains All American, resulted in the release of around 3,000 barrels of oil on Refugio State Beach and along the California coast.
Environmental groups in California praised Venoco's announcement as a sign of a shift in the energy sector in California. With the state Lands Commission now in charge of decommissioning, the groups said the bankruptcy ends a climate fight that started in the 1980s.
"We are pleased that Venoco's aging oil facilities will be removed, and the area restored to its natural condition," Linda Krop, the chief counsel at the Environmental Defense Center, said in a statement. "This action is long overdue and a huge victory for our community."
The Holly platform and onshore facilities were built in the 1960s, but closed after the Refugio oil spill in 2015.