Oil giants sell thousands of California wells, raising worries about future liability – but they deny any liability
An oil drilling rig was parked in the oil well drilling operation near Lompoc, California, on 10 March 2013.
Oil giants have sold tens of thousands of wells in California, raising questions about how far that will go to pay for damages in the wake of the BP oil spill. There are more than 3,500 wells operating in the state.
The sale of oil wells and other oil and gas exploration in California have come under scrutiny in recent months since ExxonMobil, Chevron, ConocoPhillips and other companies began selling California oil and gas leases to investors.
The oil and gas companies have been accused of selling leases at a time of high state gas prices and low gas prices. Many critics said the prices were set high to take advantage of California’s market and to encourage new drilling.
The Los Angeles Times has published the names and addresses of oil drilling companies that have received money from the oil and gas industry. Critics have said the companies have profited by setting the oil prices high, causing gas prices to spike. This allows them to make money even if there isn’t enough oil to satisfy the market.
In a report last month, Bloomberg News found that companies had netted at least $11bn by selling leases in California, where the state’s oil reserves are the largest in the nation. Companies selling leases to investors in California include oil firms such as BP, Chevron and ConocoPhillips.
ExxonMobil, the world’s largest publicly traded oil company, has sold more than 10,000 oil wells, including many in California, for at least $1bn. The company has sold more than 8,000 oil wells to various investors, many of which have received leases for more than $1bn.
After the BP oil spill in the Gulf of Mexico in 2010, the British oil giant set up a compensation fund to compensate victims of the disaster and pay damages. In October, the company announced it would pay $1bn of that fund to victims of the disaster.
In April, the company and BP shareholders settled an action against the company from victims of the disaster, to “settle and pay compensation for claims of compensation from the BP oil