HomeMy WebLinkAboutC-1799 - Sale of crude oilCITY OF NEWPORT BEACH
NOTICE OF TERMINATION
TO: Kern County Refinery, Inc.
100 Oceangate
Long Beach, California
OFFICE OF THE CITY CLERK
(714) 640 -2251
PLEASE TAKE NOTICE that effective 11:59 p.m., January 25, 1981,
that certain CRUDE OIL PURCHASE CONTRACT dated March 10y 1970
between the City of Newport Beach and Kern County Refinery, Inc.
shall be terminated.
This document shall serve as'the' notice of termination of said
contract. ...__..
Original notice was sent to you at 10929 South Street, Suite
202, Cerritos, as set forth in subject agreement, but returned
to us as not forwardable, on December 24, 1980.
Dated this 7th day of January, 1981.
Wanda E. Andersen
City Clerk
City Mall • 3300 Newport Boulevard. Newport Beach, California 92663
CITY OF NEWPORT BEACH
OFFICE OF THE CITY CLERK
(714) 640 -2251
NOTICE OF TERMINATION
TO: Kern County Refinery, Inc.
10929 South Street, Suite 202
Cerritos, California 90701
Armstrong Petroleum Corporation
P.O. .Box 1546
Newport Beach, California
PLEASE TAKE NOTICE that effective 11:59 p.m., January
25, 1981, that certain CRUDE OIL PURCHASE CONTRACT
dated March 10, 1976 between the City of Newport
Beach and Kern County Refinery, Inc. shall be terminated.
This document shall serve as the notice of termination
of said contract.
Dated this 24th day of December, 1980.
Wane.', E. Andersen
City Clerk
cc: City Attorney /
Contract file ✓
CRY Ilall • 3300 ;Newport Boulei'ard. Aewpon Beach. California 92663
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9953
RESOLUTION NO.
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF NEWPORT BEACH GIVING NOTICE OF TERMINATION
TO KERN COUNTY REFINERY, INC., OF EXISTING OIL
PURCHASE AGREEMENT AND AUTHORIZING STAFF TO.
NEGOTIATE A NEW OIL PURCHASE AGREEMENT
WHEREAS, the City Council of the City of Newport Beach
on March 22, 1976, authorized the execution of an agreement
between the City of Newport Beach and Kern County Refinery, Inc.,
for the purchase of crude oil; and
WHEREAS, said agreement provides for a division of the
payment for crude oil delivered, 7/8 to Armstrong Petroleum
Corporation and 1/8 to the City of Newport Beach; and
WHEREAS, the City of Newport Beach intends to operate
the oil fields of the City of Newport Beach as of January 26,
1981, and said division of purchase price would be rendered
inappropriate; and
WHEREAS, it is desirable to terminate said agreement
with Kern County Refinery, Inc., and to authorize the staff of
the City of Newport Beach to negotiate a new crude oil purchase
contract,
NOW, THEREFORE, BE IT RESOLVED by the City Council of
the City of Newport Beach that said agreement between the City of
Newport Beach the Kern County Refinery, Inc., be terminated,
effective 11:59 p.m. January 25, 1981. The City Clerk is hereby
authorized and directed to prepare and serve on Kern County
Refinery, Inc., a notice of termination as provided in said
agreement.
BE IT FURTHER RESOLVED that the City Council of the City
of Newport Beach hereby authorizes and directs the staff of the
City of Newport Beach to enter into negotiations for a new crude
oil purchase contract, to be effective January 26, 1981.
ATTEST:
City Cler
ADOPTED this day of WC 7, , 1980.
Mayor
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HRC /kv
122280
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TO: FINANCE DIRECTOR
FROM: City Clerk
VA -
CITY OF NEWPORT BEACH
SUBJECT: Contract No. 1799
CALIFORNIA
City Hall
3300 W. Newport Blvd.
Area Code 714
673 -2110
M' T V-4140 V71
Description of Contract Sale Of Crude Oil
Authorized by Resolution No. 9731 , adopted on March 22, 1976
Effective date of Contract April 1, 1976
Contract with gMM ckgmty gafjjw=_ I)nr-
Oarriboe, CA 90701
Amount of Contract am OO[1trwt
City Clerk
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March 25, 1976
Kern County Refinery, Inc.
10929 South Street, Suite 202
Cerritos, CA 90701
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Subject: Your purchase of crude oil from the City of
Newport Beach
C -1799
Hnclosed is an executed copy of the above agreement.
This agreement was authorized by the City Council of the
City of Newport Beach by the adoption of Resolution No.
8732.on March'122, 1976.
Doris George
Acting City Clerk
swk
enc.
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CRUDE OIL PURCHASE CONTRACT
THIS CONTRACT is made and entered this 10th day of March, 1976, by and
between THE CITY OF NEWPORT BEACH (herein referred to as "SELLER "), and KERN COUNTY
REFINERY, INC. (herein referred to as "BUYER ").
SELLER agrees to sell and deliver to BUYER and BUYER agrees to purchase and
receive from SELLER crude oil subject t o and in accordance with the terms herein
stated.
TERM
The term of this agreement shall begin on April 1, 1976, and shall continue
until terminated by at least thirty (30) days' prior written notice from one party
to the other, provided, however, that the term of this agreement may not be thus
terminated so as to end before June 1, 1976.
QUANTITY
SELLER agrees to sell to BUYER all of the crude oil available to SELLER for
purposes of sale 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. Said quantities, so determined, are subject to
corrections for temperature and volumetric deduction for water, sand and other
foreign substances as hereinafter provided.
BUYER reserves the right, at any time, upon not less than thirty (30) days'
prior written notice, to limit monthly deliveries to a quantity specified by BUYER,
which quantity shall not be less than 12000 barrels per calendar month.
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The term "barrel" whenever iced in this agreement shall mean a barrel of
forty -two (42) U.S. gallons in bulk.
600 Fahrenheit is established as thermal 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 600 Fahrenheit shall be
ascertained by multiplying the measured volume by the factor corresponding to the
observed temperature as published 11itthe American Society for Testing Materials
Petroleum Measurement Tables designation D -1250 or latest revision thereof.
The net quantity of crude oil sold and delivered by SELLER and purchased,
received and paid for by BUYER shall be the quantity at 600 Fahrenheit determined
as provided above 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 the oil fields located in the State of California and from
leases in said oil fields described in EXHIBIT "ONE" to this agreement.
WARRANTY
SELLER represents and warrants that it has good title to crude oil delivered
and the right to deliver the same free and clear
tions, and that said crude oil will be produced
applicable laws and rules and regulations issued
and hold BUYER harmless from all loss, damage or
by reason of the breach or failure of any of the
guarantees above set forth.
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of encumbrances or other obliga-
in strict compliance with all
thereunder. SELLER will indemnify
liability which BUYER may sustain
representations, warranties or
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TITLE
Title to the crude oil shall pass to BUYER as and when it is delivered to
BUYER at the Armstrong Petroleum Company Tank Farm.
UALITY
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 (3 %) by volume of water,
sand and other foreign substances nor having a gravity lower than 170 A.P.I. The
viscosity of the crude oil delivered by SELLER into the pipeline utilized by BUYER
shall be no higher than that required by BUYER for operation of the peipline
utilized by BUYER. BUYER reserves the right to establish such maximum viscosity.
In the event that SELLER requires the use of a dilutent to obtain such viscosity,
the quality of the dilutent used shall be subject to BUYER'S approval, provided,
however, that BUYER shall not act unreasonably in this regard.
If at any time crude oil offered for delivery shall be of a lower gravity
than the minimum 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 (3 %) of water, sand or other foreign substances, ascertained
as hereinafter provided, BUYER, at its option, may accept such crude oil and make
deductions 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 thereafter crude oil failing to meet such require-
ments and conditions.
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SAMPLES
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 a laboratory agreed to between the parties hereto
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 (3 %) of water, sand
or other foreign substances, BUYER willaccept 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.
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DELIVERIES
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Deliveries shall be made as and when crude oil is produced and accumulated
in approximately 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.
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.
Should trucking be required in the judgement of BUYER, such trucking shall
be scheduled by BUYER and the expense therefor shall be borne by BUYER.
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.
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PRICE
For all crude oil delivered hereunder, BUYER agrees to pay and SELLER agrees
to accept the posted prices of Standard Oil Co. of California for upper or lower
tier crude oil for the Newport (other than Anaheim Sugar type) Field for crude
oil of like gravity and quality notwithstanding sulphur content at the well in
the field where produced in effect on the date of each delivery. SELLER shall
certify to BUYER all quantities of crude oil that are exempt.
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
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 simultaneously
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 for 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 information relevent thereto
requested by the CITY OF NEWPORT BEACH.
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 providions hereof
in respect to payment therefor.
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NOTICES
E
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
ARMSTRONG PETROLEUM CORPORATION
P.O. BOX 1546
NEWPORT BEACH, CALIFORNIA
KERN COUNTY REFINERY, INC.
10929 SOUTH STREET, SUITE 202
CERRITOS, CALIFORNIA 90701
MISCELLANEOUS
This agreement shall inure to the benefit and be binding upon the heirs,
successors, and assigns of the parties hereto.
Time is expressly made of the essence in this agreement.
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
BYAW.G
MAYUK
ATTEST:
BY
Acting City erk
KERN COUNTY REFINERY, INC.
BY M. LeDoux, Vice President
D. -7- Crude Oil Supply
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RESOLUTION NO. 8 73 2
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A RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF NEWPORT BEACH AUTHORIZING THE
MAYOR AND CITY CLERK TO EXECUTE AN AGREE-
MENT BETWEEN THE CITY OF NEWPORT BEACH
AND KERN COUNTY REFINERY, INC. FOR THE
PURCHASE OF CRUDE OIL, AND AUTHORIZING
THE TERMINATION OF THE EXISTING AGREEMENT
BETWEEN THE CITY OF NEWPORT BEACH AND
GOLDEN EAGLE REFINING COMPANY, INC.
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 Kern County Refinery, Inc., for the
purpose of crude oil; and
WHEREAS, the City Council has considered the terms
and conditions of said agreement and found them to be fair
and equitable; and
WHEREAS, the presently existing contract regarding
the purchase of crude oil with Golden Eagle Refining Company
will terminate since Golden Eagle Refining Company has given the
City of Newport Beach a thirty day notice of cancellation,
effective March 31, 1976; and
WHEREAS, it is desirable and necessary to terminate
said agreement.
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 written notice to
Golden Eagle Refining Company that its agreement with the City
of Newport Beach is terminated effective March 31, 1976.
ADOPTED this 22nd day of March , 1976
yor
ATTEST:
City Clerk
HRC:yz
3/18/76