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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 - b 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 � J 0 0 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 0 0 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 -2- \ Z • 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. " -1- a 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. -2- Ci 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 -3- 0 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 Q E 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 -5- t�P 0 RT' 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. 0 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. - 2 - 0 0 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. - 3 - 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 � �� *-� r :. ¢¢ �' 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; i t i 0 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