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HomeMy WebLinkAboutC-1464 - Purchase of crude oilFebruary 20, 1973 CERTIFIED MAIL Champlin Petroleum C:3rnpany 700 Houston Natural 5as "'gilding Houston, Texas 77002 Gentlemen: At its regularly scheduled meeting of February 12, 1973, the City Council of the City of Newport Beach adopted Resolution No. 7930 which terminated the crude oil purchase /sales contract dated July 24, 1972, bataveen the City of Newport Beach and Champlin Petroleum Company and authorised the City Clerk to notify your company of this termination. Accordingly. I am officially notifying you that the contract between the City of Newport Beach a.-ad Champlin Petroleum. Company, dated July 24. 1972, shall Le terminated as of March 31, 1973 and shall have no effect after that date. Sincerely, Laura Lagios, C. M. C. City Clerk LL:DO'N:dg cc: City Attorney Assistant City Manager Bob Armstrong r m ^ � / k � ©f ■k { $ &, of . � \ 2! . a &�k 2 � � $ ll2fit / | v . ! k ®■ � \ ■ \ � © % -on I= am" Ed �tmjI lot � ƒ!� & /�\. Cc, ®k! 2 &!$| V)-X: \`� / ®� -on I= am" Ed 0 0 CITY OF NEWPORT BEACH CALIFORNIA City Hall 3300 W. Newport Blvd. Area Code 714 673 -2110 DATE July 31, 1972 TO: FINANCE DIRECTOR FROM: City Clerk SUBJECT: Contract No. 1464 Description of Contract Sale of Crude Oil Authorized by Resolution No. 7765 , adopted on July 24, 1972 Effective date of Contract MaMlin Petroleum Cmymy Contract with c/o Mr. Robert ArmBtr g Address P. 0. Box 1546 -city le c , CRUDE OIL PURCHASE /SALES CONTRACT THIS CONTRACT, dated this day of July 1972, by and between CITY OF NEWPORT BEACH as first party, hereinafter called the Seiler, and CHAMPLIN PETROLEUM COMPANY, a corporation, as second party, hereinafter called the Buyer, WITNESSETH: 1. TERM. The term of this Contract shall commence on the 1st day of August, 1972, and shall continue until September 1, 1972, and continuing thereafter until cancelled by either party hereto giving the other at least 30 days advance notice of such cancellation as provided herein. This Contract 1s also subject to termination at the option of Buyer under the circumstances set forth in paragraph 14. 2. QUANTITY. The Seller hereby sells and agrees to deliver to the Buyer all the crude petroleum oil (herein called the "Crude "), subject to the maximum limitation set forth in paragraph 12 hereof of a gravity of not less than seventeen (17 °) degrees A.P.I. at a temperature of sixty de- grees Fahrenheit produced during the term hereof by the Seller from the properties situated in the Wilmington oil field on property more particularly described in paragraph 3 hereof. 3. PROPERTY DESCRIPTION. The description of the property in- eluded within the terms and provisions of this Contract is set forth at length in Exhibit One attached hereto and made a part hereof. 4. GUARANTEE. The Seller represents that the Crude to be pro- duced from the above property and the right of the Seller to deliver same are free and clear of encumbrance or other obligation, and Seller hereby warrants title to all Crude delivered hereunder. Seller agrees to indemnify and hold harmless the Buyer from all loss, damage, cost or cost or liability which it may sustain by reason of any encumbrance or other obligation affect- ing the right of the Seller to produce, sell or deliver crude, or by reason of the title to Crude not being in the Seller or by reason of Crude not having been produced to strict compliance with all applicable laws, and rules and regulation issued thereunder. 5. DELIVERY. All deliveries hereunder are to be made from the tankage of Seller situated on the property described in paragraph 3 hereof and either (i) into the pipeline facilities of Standard 011 Company of Calif- ornia, Western Operations, Inc., for the account of Buyer, or (1i) into tank -2 trucks nominated by Buyer as specified in paragraph 14 thereof. All deliveries made under this agreement shall be gauged either in the tankage of the Seller or through appropriate LACT units. Delivery shall not be considered made nor shall title to Crude pass to Buyer until crude has been delivered into pipeline or tank trucks nominated by Buyer. When required by Buyer, the Seller will deliver all crude of a gravity under twenty degrees (20 °) A.P.I. at a temperature not less than one hundred degrees (1000) Fahrenheit nor more than one hundred seventy degrees (170 °) Fahrenheit; the proper temperature wOthin this range being dependent upon the gravity of the Crude. Buyer will advise Seller of the proper temperature. 6. GRAVITY. The gravity of the Crude delivered hereunder shall be determined in accordance with A.S.T.M. 287 in its latest revision. 7. B. S. & W. The B.S. &W. content of the Crude delivered hereunder shall be determined in accordance with A.P.I. Standard 2500 in its latest revision, using such mutually satisfactory cutting solution as will fully precipitate the B. S. & W. determined in the Crude by the above tests. Buyer shall make a deduction for all B. S. & W. as determined by the tests hereinabove mentioned. Buyer shall have the right to refuse to accept any Crude containing in excess of three percent (3x) B. S. & W. In the event Buyer agrees to accept Crude in excess of three percent (3Z) B. S. & W., then Buyer shall charge a dehydration charge and Seller agrees that said charge can be deducted by Buyer from payments hereunder. 8. TEMPERATURE. Sixty degrees (600) Fahrenheit is established as the normal temperature for all crude delivered hereunder. Correction in volume for Crude delivered at temperatures other than sixty degrees (600) Fahrenheit shall be made according to the "Standard Abridged Volume Correc- tion Table for Petroleum Oils" A.S.T.M. designation D- 206 -36. 9. SAMPLES. All samples for testing shall be taken from de- livery tanks or from the automatic sample container on the LACT unit and shall represent a composite of the crude oil to be delivered hereunder. It is expressly understood and agreed that Buyer shall not be re- quired to accept any Crude produced in violation of the orders of any properly constituted State or Federal authority or produced in excess of the quotas fixed from time to time by any reasonable conservation or curtailment program or fixed by the Oil Umpire or any deputy umpire of the State of California. 10. TESTING. -3- Buyer shall notify Seller prior to conducting gravity or B. S. b W. tests. Tests shall be conducted in the presence of a representative of the Seller if the Seller so requests. 11. MAXIMUM LIMIT. Buyer shall not be required to accept Crude under this Contract in excess of fifteen thousand (15,000) barrels during any one month. In the event the total quantity of oil available for delivery in any one month should exceed the fifteen thousand (15,000) barrels specified herein, Seller shall notify Buyer of such excess. Within ten (10) days after such notification by Seller, Buyer shall advise Seller in writing whether it is willing to accept the excess to accordance with the terms of this agreement or is declining to purchase the same. In the event Buyer declines to purchase the excess, Seller may make the surplus quantities available to any other buyer. 12. INTERRUPTION OF DELIVERIES OR RECEIPTS. In the event of any temporary interruption of the operations of Seller by reason of or caused by or arising out of strikes, fires, washouts, sanding of wells, break- age of equipment, tankage or pipe lines, war, declared or undeclared, in- evitable cause, or any cause whatsoever, not under the control of Seller, the Seller shall not be required to deliver Crude hereunder during the period of such temporary interruption, but deliveries shall commence immediately upon the cessation of such temporary interruption. In the event of the total or partial temporary interruption of the business of the Buyer by reason of or caused by or arising out of any of the aforesaid causes, or any cause whatsoever, not under the control of the Buyer, the Buyer shall not be re- quired to receive any Crude hereunder during the period of such temporary in- terruption but receipt thereof shall commence immediately upon cessation of such temporary interruption. 13. PRICE. For ail crude oil delivered hereunder by Seller into the facilities of Standard 011 Company of California, Western Operations, Inc., pipeline system for the account of Buyer, Buyer agrees to pay and Seller agrees to accept the price posted by Standard 011 Company of California, Western Operations, Inc., for crude oil of like volume and gravity as posted by Standard Oil Company in their Schedule #149 dated November 24, 1970, for Newport (Anaheim Sugar area) listed in Column 2 of the above Schedule, plus 10t per barrel. From time to time and as often as Standard Oil.Company, for any reason, refuses to accept for the account of Champlin, crude oil from 'oe • -4 0 properties as described in this agreement and it is neces!ary for Champlin to purchase and move the crude by tank truck, then the price which Buyer agrees to pay and Seller agrees to accept will be the price as listed above less the cost to Buyer of the tank truck movement from the lease tanks to Buyer's Wilmington, California refinery. 14. IRREGULAR DELIVERIES. If at any time Crude offered for delivery hereunder shall not be within the limitations and specifications herein prescribed, Buyer. at its option, may accept such Crude, but no such acceptance shall be deemed a waiver of Buyer's right at any time thereafter to require deliveries hereunder to strictly conform to the herein limitations and specifications, or the Buyer's right to thereafter refuse to accept oil not conforming to said limitations and specifications. 15. PAYMENT. All payments for Crude delivered hereunder shall be made to Seller or to Seller's assignee named in a written assignment which has actually been received by Buyer at the time payment is due here- under. Such payment for Crude delivered hereunder in any calendar month shall be made on the twentieth (20th) day of the following month. If. at the time any payment is due but unpaid, a conflicting claim or claims are or may be made against Buyer as to title of Seller or Seller's assignee to any Crude delivered hereunder or any part thereof or any payment due here- under or any portion thereof, Buyer may, (i) withhold all payments then and thereafter becoming due pending final determination of the rights of con- flicting claimants or (ii) file an appropriate action in interpleader and thereafter discharge all further obligations to make payments hereunder, by paying the Court the amount of any withheld payments as well as all payments thereafter becoming due. A conflicting claim or claims shall be deemed to exist whenever Buyer has reason to believe that there is any de- fect in Seller's title to the Crude produced from the property described in Paragraph 3, including but not limited to any attachment or any lien asserted on any Crude delivered hereunder or any payment therefor otherwise due here- under. In the event that such conflicting claim exists at any time then Buyer may terminate this Contract by thirty days' written notice to Seller. In the event there shall be imposed by any properly constituted governmental authority, a sales tax in addition to any such taxes as now existing, Seller 0 -5- • agrees to pay the same, further agreeing that if they be no` paid by Seiler, they may be paid by Buyer and deducted from the amount of payments otherwise due hereunder. 16. NOTICES. Any notice required or desired to be served hereunder may be served by registered U. S. Mail, postage prepaid with return receipt requested and addressed to the parties hereto at the addresses indicated below or at such address as either party may desig- nate by notice to the other: Champlin Petroleum Company 700 Houston Natural Gas Building Houston, Texas 77002 City of Newport Beach 3300 Newport Boulevard Newport Beach, California 92660 Notice by mail shall be deemed served on the expiration of the second business day following mailing. Everything herein contained which binds or affects the parties hereto shall in tike manner bind and affect their respective successors and assigns. IN WITNESS WHEREOF, the said parties hereto have caused this Contract to be executed in duplicate. CHAMPLIN PETROLEUM COMPANY A °FR0VED AS TO FOPM Aanager, Supply Department Cri-yj 4 L\ CITY OF NEWPORT BEACH ATTEST: cU P, irlpi l0 EXHIBIT ONE All those certain uplands, tidelands, submerged lands and filled lands owned by the City of Newport Beach, lying be- tween the southwesterly prolongation of the southeasterly line of 53rd Street, as said 53rd Street is laid out and shown upon a map of Ocean Front Tract, Newport Beach, recorded in Book 4, page 12 of Miscellaneous Maps, records of Orange County, California, and the westerly boundary line of the City of Newport Beach, and southwesterly of the Northeasterly line of Ocean Front, formerly Ocean Avenue, as said Ocean Avenue is laid out and shown upon said map of Ocean Front, and map of Seashore Colony Tract, recorded in Book 1, page 25 of Miscellaneious Maps, records of said County. RESOLUTION NO. 7 76 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH AUTHORIZING THE EXECUTION OF AN AGREEMENT BETWEEN THE CITY OF NEWPORT BEACH AND CHAMPLIN PETROLEUM COMPANY FOR THE PURCHASE OF CRUDE OIL WHEREAS, there has been presented to the City Council of the City of Newport Beach a certain contract between the City of Newport Beach and Champlin Petroleum Company for the purchase of crude oil; and WHEREAS, the City Council has considered the terms and conditions of said contract and found them to be fair and equitable; NOW, THEREFORE, BE IT RESOLVED that said contract for the purchase of crude oil is approved, and the Mayor and City Clerk are hereby authorized and directed to execute the same on behalf of the City of Newport Beach. ADOPTED this 24th day of July , 1972 Mayor ATTEST: City Clerk