HomeMy WebLinkAboutC-1512 - Purchase of crude oil• Q_
GOLDEN EAGLE REFINING COMPANY, INC.
615 SOUTH FLOWER STREET
LOS ANGELES, CALIFORNIA 90017
TELEPHONE 624 -7541
March 1, 1976
City of Newport Beach
City Hall
3300 Newport Boulevard
Newport Beach, California 92660
Attention: Mr. F. Ivens
Gentlemen:
jJ °,'' RICEIVEO `r
�ERSOt -
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31976
CTTY OF
flEWPORT BEACH, �<
CALIF.
This letter refers to the agreement between us, dated February 20, 1973,
whereunder we purchase crude oil from you from the Newport Beach Oil
Field.
In accordance with the provisions of said agreement we hereby give 30 days
notice of termination of said agreement. Therefore, effective March 30,
1976, unless otherwise sooner terminated by mutual agreement of buyer and
seller, said agreement shall be terminated and be of no further force or
effect.
If the foregoing is in accordance with your understanding, kindly sign and
return the duplicate of this letter to the undersigned.
Very truly yours,
GOLDEN EAGLE REFINING COMPANY, INC.
Craig G. Colley
Vice President
Supply & Distribution
CITY OF NEWPORT BEACH
BY - JE!{�/0 Date tc,u lL L
A MEMBER O THE ULTRAMAR GROUP OF COMPANIES
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GOLDEN EAGLE REFINING COMPANY, INC.
615 SOUTH FLOWER STREET
LOS ANGELES, CALIFORNIA 90017
TELEPHONE 624 -7841
February 12, 1974
City of Newport Beach
3300 Newport Boulevard
Newport Beach, CA 92660
Attention: Mr. Robert L. Wynn
City Manager
Gentlemen:
' \
This refers to the agreement between us, dated February ZO, 1973;:x'J
whereunder Golden Eagle Refining Company, Inc. purchases crLid*e
oil from the City of Newport Beach. Confirming conversations be-
tween us, it is hereby mutually agreed that effective January 1, 1'974;
said agreement shall be amended as follows:
DELIVERIES
Should trucking be required, such trucking shall be scheduled by
Buyer and the expense therefore shall be borne by Buyer.
PRICE
For all crude oil delivered hereunder, Buyer agrees to pay and
Seller agrees to accept the price offered by Standard Oil Company
of California, Western Operations, Inc. for crude oil that is exempt
from price control under applicable Federal oil price regulations
for crude oil of the gravity in the Newport Beach field (other than
Anaheim Sugar Type) in effect at the time of each delivery.
PAYMENT
All payments for the crude oil delivered during each calendar month
shall be made by the fifteenth day of the succeeding calendar month,
by mailing check therefor to:
7 /8ths to: ARMSTRONG PETROLEUM CORPORATION
P.O. BOX 1546
NEWPORT BEACH, CALIFORNIA
A MEMBER OF THE ULTRAMAR GROUP OF COMPANIES
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1 /8th to: THE CITY OF NEWPORT BEACH
3300 NEWPORT BOULEVARD
NEWPORT BEACH, CALIFORNIA 92660
With each payment to the City of Newport Beach, Buyer will simul-
taneously provide a declaration under penalty of perjury, in the
format prescribed by the City of Newport Beach, indicating the
quantity of crude oil purchased during the calendar month of which
payment is being made, the amount paid to Armstrong Petroleum
Corporation in connection therewith, the amount paid to the City
of Newport Beach in connection therewith, plus any other informa-
tion relevant thereto requested by the City of Newport Beach.
Except as expressly stated and amended above, said agreement of
February 20, 1973, shall remain in full force and effect.
If the foregoing is in accordance with your understanding, kindly
indicate your approval and acceptance by signing and returning the
duplicate of this letter to the undersigned.
Very truly yours,
GOLDEN EAGLE REFINING COMPANY, INC.
Craig G. Colley
Manager
Refinery - Supply and Exchange
APPROVED AND ACCEPTED
CITY OF NEWPORT BEACH
ATTEST:
By
CITY CLERK v
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AGREEMENT OF SALE
0
This agreement is made and entered into this 4th day of
February, 1974, by and between the CITY OF NEWPORT BEACH (here-
inafter referred to as "BUYER "), and GOLDEN EAGLE REFINING
COMPANY, INC. (hereinafter referred to as "SELLER ").
SELLER agrees to sell and deliver to BUYER and BUYER agrees
to purchase and receive from SELLER premium grade gasoline (98 -99
Octane Research Method), regular grade gasoline (90 -91 Octane Research
Method), and No. 2 Diesel Fuel subject to and in accordance with the terms
herein stated.
CONDITIONS
The parties acknowledge that they have another agreement between
them, dated February 20, 1973, whereunder GOLDEN EAGLE REFINING
COMPANY, INC. purchases crude oil from the CITY OF NEWPORT BEACH.
It is further agreed that a material consideration for SELLER entering into
this agreement is the validity and operation of the aforementioned agreement.
This agreement is expressly conditioned upon the validity of the aforementioned
agreement, and shall, at the option of SELLER herein, terminate simultan-
eously with any termination of the aforementioned agreement. Said afore-
mentioned agreement will hereinafter be referred to as the "crude oil
purchase agreement. "
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TERM
The term of this agreement shall be the same as the term of
the crude oil purchase agreement.
QUANTITY
During the term of this agreement, SELLER agrees to sell to
BUYER the following quantities of the following fuels:
(a) Up to three hundred thousand (300, 000) gallons of premium
grade gasoline (98 -99 Octane Research Method);
(b) Up to six thousand (6, 000) gallons regular grade gasoline
(90 -91 Octane Research Method); and
(c) Up to sixty thousand (60, 000) gallons of No. 2 Diesel fuel.
T)F,T.TVF.RV
SELLER agrees to deliver quantities of the aforementioned fuel
ordered by BUYER to the NEWPORT BEACH CITY storage facility
designated by BUYER.
Notwithstanding anything to the contrary herein, SELLER shall
not be obligated to make any deliveries in which the combined quantities
per delivery are less than a truck and trailer load.
In no calendar month, shall SELLER be obligated to deliver
more than one- eighth (1 /8th) of the total maximum quantities of each
fuel set forth above.
All deliveries hereunder shall be made within forty -eight (48)
hours after receipt of purchase orders from BUYER.
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PRICE
10
The price for fuels delivered pursuant to this agreement shall
be as follows, plus the trucking rates as set by the P. U. C. :
(a) For premium grade gasoline, the sum of $0.247 per
gallon plus all applicable taxes;
(b) For regular grade gasoline, the sum of $0. 235 per
gallon plus all applicable taxes; and
(c) For Diesel No. 2 fuel, the sum of $0.20 per gallon
plus all applicable taxes.
The foregoing prices are f, o. b, rack prices charged by SELLER
to its wholesale customers. These prices are subject to, and will
escalate with, such price changes as are permitted, authorized, or
promulgated by the Federal Energy Office or such other governmental
agencies as may be empowered to impose and /or enforce price controls
and regulations.
PAYMENT
All sums due hereunder shall be paid by the 15th of the month
following the calendar month in which deliveries are made.
FORCE MAJEURE
In the event of interruption of the operations of SELLER by
reason of, caused by or arising out of strikes, fires, washouts, sanding
of wells, breakage of tankage or pipelines, war, inevitable cause or any
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other cause whatsoever, not under the reasonable control of SELLER,
then SELLER shall not be required to deliver fuels so affected during
the period of such interruption but deliveries shall commence immediate-
ly upon cessation of such interruption. In the event of the total or partial
interruption of the business of BUYER, by reason of, or caused by or
arising out of any of the aforesaid causes, or any other cause not under
the reasonable control of BUYER, then BUYER shall not be required to
receive any of said fuels during the period of such interruption, but may
commence reordering fuels immediately upon cessation of such inter-
ruption.
NOTICES
Any notice hereunder addressed to the respective parties at the
address stated below, or to such other address as each of them may
hereafter from time to time designate in writing to the other, and
deposited in a United States Post Office, postage prepaid, shall be
considered good and valid notice hereunder effective from the date of
mailing:
CITY OF NEWPORT BEACH
3300 NEWPORT BOULEVARD
NEWPORT BEACH, CALIFORNIA 92660
GOLDEN EAGLE REFINING COMPANY, INC.
615 SOUTH FLOWER STREET
LOS ANGELES, CALIFORNIA 90017
MISCELLANEOUS
This agreement shall inure to the benefit and be binding upon
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the heirs, successors, and assigns of the parties hereto.
That this agreement is entered into with reference to the laws
of the State of California which shall be applied with regard to any
disputes arising hereunder.
CITY OF NEWPORT BEACH
By :4*�L/ Y�
MAYOR
ATTEST:
By "4z..
CITY CLEF
GOLDEN EAGLE REFINING COMPANY, INC.
By <_ H. G. McKay j
Senior Vice - President
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CITE' OF NEWPORT BEACH j
a.j CALIFORNIA nua
C7�lFO RN�P,Y City Hall
3300 Newport Blvd.
(714) 873 -2110
January 14, 1974
Mr. Craig Colley
Golden Eagle Refining Company, Incorporated
615 S. Flower Street
Los Angeles, CA. 90017
Dear Mr. Colley:
This is to advise you that effective thirty days from the
date of this letter, the City of Newport' Beach will terminate
the contract for the sale of crude oil to your company. This
letter will serve to fulfill the notification requirement
specified in the contract between the City of Newport Beach and
Carson Oil Company dated February 20, 1973.
Sincerely yours,
Donald A. McInnis
Mayor
ATTEST:
City Clcrk
! 0
CITY OF NEWPORT BEACH
TO: FINANCE DIRECTOR
FROM: City Clerk
SUBJECT: Contract No. 1512
Description of Contract
Authorized by Resolution No.
Effective date of Contract
Contract with
7930
CALIFORNIA
City Hall
3300 W. Newport Blvd,
Area Code 714
673 -2110
DATE February 21, 1973
of Crude Oil
adopted on February 12, 1973
February 20, 1973
Carson Oil Compan
Address 900 Wilshire Boulevard
Los Angeles, %A 90017
Amount of Contract see contract
City ten<
February 21, 1973
Carson Oil Company
900 Wilshire Boulevard
Ins Angeles, CA 90017
Subject: Crude oil Contract
Contract too. 1512
Enclosed is an executed copy of the ocatract betwmm
you and the City of Newport Beach for the purdume of
crude oil. ',said anent was authorized by the City
Council cn Februmy 12 by the adoption of Resolution
No. '7930.
Laura Lagios, C.M.C.
City Clerk
LL:swk
enc.
x: Bob Armstrong (w /attaclmnt)
City Attorney (w /attachment)
Assistant City Marker (w /attadmnwTt)
CRUDE OIL PURCHASE CONTRACT (1, /S / 2
THIS CONTRACT, made and entered into this t<TH day of f ? ?u'4/'y 197
by and between CITY OF NEWPORT BEACH herein called Seller, and
CARSON OIL COMPANY, herein called Buyer:
WITNESSETH:
Seller agrees to sell and deliver to Buyer and Buyer agrees to purchase and
receive from Seller crude oil subject to and in accordance with the terms herein
stated.
TERM
The contract period shall begin April 1 , 19 73 , and continue until
terminated by at least 30 days prior written notice from one party to the
other, provided that the contract period may not be thus terminated so as to end
before October 1 , 1973
QUANTITY
All of Seller's share, plus all the oil which Seller is obligated or authorized to
sell and receive payment for, from the property situated in the oil field or oil
fields described herein as determined from gauges taken in Seller's delivery
tanks or as determined from meters when delivery is made by means of an
automatic custody transfer unit approved by Buyer. Such quantities so determined
are subject to corrections for temperature and volumetric deduction for water,
sand and other foreign substances as hereinafter provided.
Seller shall not be required to deliver such crude oil as Seller may be obligated to
deliver as royalty in kind. Buyer reserves the right at any time upon not less than
thirty days' prior written notice to limit monthly deliveries to a quantity specified
by it which shall not be less than 12, 000 barrels per calendar month. In the event
of such notice any excess over the quantity therein specified shall be free from this
contract during the remainder of its term.
The term "barrel" whenever used in this agreement shall mean a barrel of 42 U.S.
gallons in bulk.
60° Fahrenheit is established as the normal temperature for crude oil to be delivered
The quantity and temperature of the crude oil in any tank shall be determined at time
of delivery, and the volume at 60° Fahrenheit shall be ascertained by multiplying the
measured volume by the factor corresponding to the observed temperature as published
in the American Society for Testing Materials Petroleum Measurement Tables designa-
tion D -1250 or latest revision thereof.
The net quantity of crude oil sold and delivered by Seller and purchased, receiver: and
paid for by Buyer shall be the quantity at 60 ° Fahrenheit determined as provided above.
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less full volumetric deduction for all water, sand or other foreign substances as
determined by tests hereinafter specified.
LOCATION AND PROPERTY DESCRIPTION
Buyer agrees to purchase and receive crude 'oil and Seller agrees to sell and deliver
crude oil from oil fields located in the State of California and from leases in said oil
fields described as follows:
County (ies):
Oil Fields(s):
Property Description(s): Exhibit One Attached
WARRANTY
Seller represents and warrants that it has good title to crude oil delivered and the
right to deliver the same free and clear of encumbrances or other obligations, and
that said crude oil will be produced in strict compliance with all applicable laws auc
rules and regulations issued thereunder. Seller will indemnify and hold Buyer harm-
less from all loss, damage or liability which Buyer may sustain by reason of the.
breach or failure of any of the representations, warranties or guarantees above set
forth.
TITLE
Title to the crude oil shall pass to Buyer as and when it is delivered into Buyer's
designated receiving facility. `
QUALITY
The quality of crude oil delivered by Seller to Buyer hereunder shall be determined
by the tests hereinafter specified. Buyer shall not be obligated to accept any crude
oil containing more than three per cent by volume of water, sand and other forei;;n
substances nor having a gravity lower than 17 degrees A. P. 1. The viscosay
of the crude oil delivered by Seller into Buyer's pipeline shall be no higher than chat
required by Buyer for operation of its pipeline. Buyer reserves the right to establish
such maximum viscosity. In the event that Seller requires the use of a diluent to
obtain such viscosity, the quality of the diluent used shall be acceptable to Buyer.
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If at any time crude oil offered for delivery shall be of a lower gravity than the
min.imum gravity hereinbefore specified, Buyer, at its option, may accept said
crude oil. If at any time crude oil offered for delivery shall contain more than
three per cent of water, sand or other foreign substances, ascertained as herein-
after provided, Buyer, at its option, may accept such crude oil and make deduction
for all water, sand or other foreign substances as determined by said test. Buyer
shall be entitled to make a dehydration charge and Seller agrees that Buyer can deduct
said charge from payments hereunder. Neither acceptance shall be deemed a waiver of
Buyer's right at any time thereafter to require strict compliance with the requirements
and conditions hereinbefore specified, or of Buyer's right to refuse to accept 0 ereafter
crude oil failing to meet such requirements and conditions.
SAMPi,ES
All samples for testing shall be taken by Buyer through sample cocks from Seller's
delivery tanks or by means of an approved delivery line sampler. Sample cocks shall
be installed on Seller's shipping tanks in accordance with A. P. I. standards
TESTS
Crude oil shall be tested in Buyer's laboratory and such tests may be witnessed by
Seller's representative should it so desire. Tests shall be conducted in accordance
with methods prescribed in ASTM Standards on Petroleum Products and Lubricants
as designated hereinbelow in their latest revision at time of delivery.
Water, Sand and Other Foreign Substances: Crude oil delivered must be free from
water, sand and other foreign substances as ascertained by the Centrifuge Method
(ASTM D -96), using a solvent for such test approved by Buyer. Should said test
fail to prove the existence of more than three per cent of water, sand or other
foreign substances, Buyer will accept the crude oil and make deduction for all
water, sand and other foreign substances determined by such test. The solvent
used in said Centrifuge Method shall be of such composition as may be required to
wholly precipitate the water, sand and other foreign substances in the crude oil.
Gravity: The gravity of the crude oil delivered shall be the gravity of the samples
as determined by ASTM Method D -287 corrected to 600 F. as shown in Table No. 5
of ASTM -IP Measurement Tables.
Viscosity: The viscosity of the crude oil delivered shall be determined in accordance
with ASTM Method D -88.
DELIVERIES
Deliveries shall be made as and when crude oil is produced and accumulated in approx-
imately shipping tank lots. Whenever a tank of crude oil is tendered by Seller and
accepted by Buyer, delivery of the crude oil so tendered and accepted shall be made
by Seller and received by Buyer without unnecessary delay.
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Deliveries are to be made at Seller's expense into a pipeline designated by Buyer
from Seller's delivery tanks and Seller agrees to furnish pumps acceptable to Buyer
and to provide pipelines and connections, stream or other power and labor necessary
to effect such deliveries, but Seller shall not be required to pump against a line
pressure in excess of 800 pounds per square inch.
Buyer shall have the right but not the obligation to lay, maintain, operate and remove
such pipelines across and from the above described property as it may deem necessary
in connection with the receipt and movement of crude oil delivered hereunder.
During any time that the aggregate quantity of crude oil which Buyer is committed to
take into its pipelines and other facilities, including Buyer's own production, exceeds
the capacity of such pipelines and facilities, then and in such event, and while such
conditions shall continue, Buyer shall be obligated to receive from Seller only such
relative quantities of crude oil as, together with Buyer's own production and other
commitments, Buyer can currently receive or handle in its pipelines and other
facilities.
Should trucking be required, such trucking shall be scheduled by Buyer and the ex-
pense therefor shall be borne by Seller.
FORCE MAJEURE
In the event of interruption of the operations of Seller by reason of, caused by or
arising out of strikes, fires, washouts, sanding of wells, breakage of tankage or
pipelines, war, inevitable cause or any other cause whatsoever, not under the
reasonable control of Seller, then Seller shall not be required to deliver crude oil
so affected during the period of such interruption but deliveries shall commence
immediately upon cessation of such interruption. In the event of the total or partial
interruption of the business of Buyer by reason of, or caused by or arising out of
any of the aforesaid causes, or any other cause not under the reasonable control of
Buyer, then Buyer shall not be required to receive any of said crude oil during the
period of such interruption, but the receipt thereof shall commence immediately
upon the cessation of such interruption.
PRICE
For all crude oil delivered, Buyer agrees to pay and Seller agrees to accept the
price offered by Buyer for crude oil of like gravity and quality at the well in the
field where produced in effect on the date of each delivery according to the price
per barrel posted by Standard Oil Company of California, Western Operations, Inc.
in the Newport - (Other than Anaheim Sugar Area) less two cents (Z�) per barrel.
PAYMENT
All payments for the crude oil delivered during each calendar month shall be made
by the fifteenth day of the succeeding calendar month, by mailing check therefor to:
City of Newport Beach
3300 Newport Boulevard
Newport Beach, California 92660
In the event of a dispute as to the title to crude oil deliverable, or as to any payment
therefor, Buyer may withhold payment pending determination of such dispute, or may
interplead the claimants; the payment into court by Buyer of the amount due for crude
oil delivered shall be compliance with the provisions hereof in respect to payment
therefor.
NOTICES
Any notice hereunder addressed to the respective parties at the address stated below,
or to such other address as each of them may hereafter from time to time designate
in writing to the other, and deposited in a United States Post Office, postage prepaid,
shall be considered good and valid notice hereunder effective from the date of mailing.
City of Newport Beach
3300 Newport Boulevard
Newport Beach, California 92660
ASSIGNMENT
Carson Oil Company
900 Wilshire Boulevard
Los Angeles, California 90017
Everything herein contained which binds or affects the parties hereto shall in like
manner bind and affect their respective successors and assigns.
Time is of the essence of this contract.
IN WITNESS WHEREOF, the said parties hereto have caused this contract to be
executed in duplicate.
CITY OF NEWPORT BEACH CARSON OIL COMPANY
BY
Mayor
ATTEST:
City Clerk
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Buyer
EXEIBIT ONE.
All those certain uplands, tidelands, sub -
,r,e --ed lands and filled lands owned by the City of
Newport Beach, lying between the southwesterly pro -
longation 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, p�ge.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, formely Ocean
Avenue, as said Ocean Avenue is laid out and shown
i
_ upon said map of Ocean Front, and :tap of Seashore
Colony Tract, recorded in Book 7, page 25 of Mis-
cellaneous Maps, records of said County;
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RES OLUTI ON NO. Z tJ 3 L
A RESOLUTION CF THE CITY COUNCIL
OF NEWPORT BEACH AUTHORIZING THE
OF AN AGREEMENT BETWEEN THE CITY
BEACH AND CARSON OIL COMPANY FOR
OF CRUDE OIL AND TERMINATING THE
AGREEMENT BETWEEN THE CITY OF NEI
AND CHAMPLIN PETROLEUM COMPANY
OF THE CITY
EXECUTION
OF NEWPORT
THE PURCHASE
EXISTING
PPORT BEACH
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 Carson Oil 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; and
WHEREAS, it is desirable and necessary to terminate
the crude oil purchase agreement which presently exists between
the City of Newport Beach and Champlin Petroleum Company.
NOW, THEREFORE, BE IT RESOLVED that said contract
above described 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;
BE IT FURTHER RESOLVED, that the City Clerk is hereby
authorized and directed to forward a written notice to Champlin
Petroleum Company terminating, as of March 31, 1973, its crude
oil purchase agreement with the City of Newport Beach.
ADOPTED THIS day of FED " " 1973 1973.
Mayor
ATTEST:
City Clerk _
DRB : sli
2/6/73