HomeMy WebLinkAbout84-25 - C-2428 - Oil Operations of Facilities in West NewportRESOLUTION NO. 84 -25
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF NEWPORT BEACH AWARDING A CONTRACT FOR OIL
OPERATIIONS TO SAMPSON OIL COMPANY CONCERNING
OIL FACILITIES IN WEST NEWPORT (C -2428)
WHEREAS, pursuant to Notice inviting bids for work, and
is specifications heretofore adopted concerning the operation of oil
facilities in West Newport, bids were received and publicly
opened and declared on January 11, 1984, at 10:00 a.m. , in the
office of the City Clerk; and
WHEREAS, after review of all bids, it appears that
SAMPSON OIL COMPANY presented the most favorable bid, based upon
criteria previously approved by the City Council.
NOW, THEREFORE, BE IT RESOLVED by the City Council of
the City of Newport Beach that the bid of SAMPSON OIL COMPANY, in
the amount of $4,300 per month, for the operation and maintenance
of City -owned oil facilities in West Newport, plus an additional
$50.00 per hour for engineering work, be and hereby is accepted,
pursuant to the terms and conditions of that certain Oil Operat-
ing Agreement between the parties, a copy of which is attached
hereto as Exhibit "D" and incorporated herein by reference.
BE IT FURTHER RESOLVED, that the Mayor and City Clerk
are hereby authorized and directed to execute the Oil Operating
Agreement between the parties referred to herein, all in accor-
dance with the specifications, bid and this award, on behalf of
the City of Newport Beach.
BE IT FURTHER RESOLVED that the City Clerk be and
herebyis is directed to furnish an executed copy of this
Resolution awarding said contract for services to SAMPSON OIL
COMPANY, the successful bidder thereon.
is ADOPTED this 26th dz
ATTEST:
City Clerk —
/pr
RSP /Sampson
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AGREEMENT FOR OPERATING CITY
OWNED OIL FACILITIES IN WEST NEWPORT
THIS AGREEMENT is made and entered into this day of
March, 1984, by and between the CITY OF NEWPORT BEACH, a Charter
City and Municipal Corporation, hereinafter "City," and SAMPSON
OIL COMPANY, hereinafter "Operator."
W I T N E S S E T H
WHEREAS, City owns 16 tideland oil wells and related oil
production facilities in West Newport, the location of which is
reasonably and accurately depicted on Exhibit "A" attached hereto
and incorporated herein; and
WHEREAS, pursuant to Section 7058 et seq., of the California
Public Resources Code, City expressed its intention to enter into
an Oil Operating Agreement by inviting bids thereon pursuant to
Resolution No. 83 -127, adopted by the City Council on December
12, 1983; and
WHEREAS, after review of bids submitted pursuant to require-
ments. of said Notice a copy of which is attached hereto as
Exhibit "B ", City found and determined that Operator presented
the most favorable bid based upon application of the following
criteria:
1. Professional qualifications;
2. Monthly service fee and hourly rates;
3. Capability of firm to accomplish the work in conformance
with the requirements of the City of Newport Beach;
•
4. Specialized experience of the firm in the type of work
required;
5. Past demonstration of performance similar to governmen-
tal agencies or with private industry; and
6. Familiarity with geographical area of the project; and
EXHi91'r
WHEREAS, on January 11, 1984, City accepted the bid proposal
of Sampson Oil Company, a copy of which is attached hereto as
Exhibit "C" and incorporated herein;
NOW, THEREFORE, in consideration of the foregoing, the par -
ties hereto agree as follows:
1. GENERAL
.(a) City engages Operator to perform professional ser-
vices hereinafter described for the compensation
hereinafter stated.
(b) Operator agrees to perform said services upon the
.terms and conditions hereinafter set forth.
2.. SCOPE OF WORK
(a) Duties of Operator included in the monthly service
fee include:
(i) Performance of` all work necessary to man-
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age, operate, produce, protect and main-
tain City owned tideland wells, tank farm,
pipelines and related oil production
facilities in accordance with oil field
practices.
(ii)
Respond to all emergencies and provide for
personnel to safely and continuously oper-
ate the oil facilities 24 hours per day,
seven days per week.
(iii)
Provide full -time, qualified, pump opera-
for with field truck and pay all costs,
direct and indirect, relating to the
.
employment of the pumper and use of the
truck.
(iv)
Provide City with detailed recommenda-
tions, cost estimates and technical advice
to improve production, maintenance and se-
curity for all oil facilities.
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(v) Maintain accurate, daily records of all
production, treatment of oil, cut and tem-
perature of oil, deliveries and field tes-
ting on forms provided by City.
(vi) Recommend, schedule, coordinate and in-
spect the work performed by all oil field
service contractors.
(vii) Schedule, supervise and coordinate the
transfer of all oil and gas sold and gauge
and measure promptly the quantity of oil
and gas produced, saved and shipped.
(viii) Maintain detailed records and submit
signed invoices for all material, equip-
ment and services rembursable by City.
(ix) Perform individual well tests at least
every six months, indicating rate of
production and quantities of oil, water
and sand produced.
(x) Furnish small hand tools required in nor-
mal operations.
(xi) Be responsible for, and pay all of, State
and Federal income taxes- on Operators'
compensation and all transportation,
administrative and overhead costs.
3. DUTIES OF CITY
.(a) Pay Operator a monthly service fee of $4,300 for
operation and.maintenance of City owned oil produc-
tion facilities;
(b) Pay Operator $50.00 per hour, not to exceed $400.00
per day, for providing City requested extra
engineering work;
(c) City to -pay nothing to Operator for extra
administrative and office work provided in response
to City requests;
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(d) Pay for all major repair and improvement work per -
formed on oil wells and related production facili-
ties by oil field service contractors and vendors;
• (e) Unless otherwise specified, pay for all utilities,
chemicals, materials and supplies required to oper-
ate and maintain oil wells and related production
facilities;
(f) Be responsible for the marketing of all oil and gas
produced;
(g) Obtain all operating permits;
(h) Pay all property taxes on the production and mining
of oil and gas.
4. SPECIAL PROVISIONS
(a) Assignment
No agreement or portion thereof may be assigned
without the specific, written consent of City.
(b) Authority of City
City shall have final authority in all matters
effecting work.
(c) Term
The term of this Operating Agreement shall be for a
period of two years.
(d) Cancellation
The Operating Agreement may be cancelled at anytime
by City without liability for damages when, in
City's opinion, Operator is not complying in good
faith.
(e) Inspection
. All work and operations shall, at all times, be
subject to inspection and approval by City. All
materials and work shall be of the highest quality
and shall be in accordance with good oil field and
construction practices.
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(f)
Protection of Environment
All oil production facilities are located in, and
situated near, environmentally - sensitive wetland
habitats. Operator shall exercise every reasonable
precaution to protect the wetlands, channels and
bodies of water from pollution of any kind.
(g)
Safety
The highest possible priority is to be placed on
conducting a safe operation. The Operator shall
comply with the Safety Orders of the State Division
of Industrial Safety and all other applicable
safety laws, ordinances and regulations.
(h)
Cooperation with Others
Operator shall cooperate and take direction from
City and its authorized representatives. City has
a "non- exclusive" property right to operate and
maintain its oil production facililties. Other oil
companies and utilities have operating rights over
the same area. Operator will be required to fully
cooperate with others and to schedule and coordin-
ate work so as not to interfere with the rights of
others.
(i)
Use of City Personnel
It is the policy of City not to use City personnel
in connection with normal operations of oil fields,
and every effort shall be made by Operator to
accomplish the required work by using outside
contractors and laborers.
(j)
Labor
Operator shall comply with all applicable Federal,
State and Local labor laws.
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•
•
(k) Liability Insurance
Operator shall furnish City with a policy or
Certificate of Liability Insurance in which City is
named as the insured, or as an additional
insured. The coverage shall provide the following
minimum limits:
Bodily Iniurv:
$250,000 each person
$5000000 each occurrence
$500,000 aggregate products
completed operations
Property Damage:
$100,000 each occurrence
$250,000 aggregate
A combined single limit policy with aggregate limits in
the amount of $1,000,000 will be considered equivalent
to the required minimum limits. Insurance companies
shall be assigned Policyholders' Rating B (or better) by
the latest edition of Best's Rey Rating Guide: Property
Casualty. All liability insurance policies shall bear
an endorsement or shall have attached a Rider which pro-
vides that, in the event of expiration or proposed con -
cellation of such policies, for any reason whatsoever,
City shall be notified by Registered Mail, Return Re-
ceipt Requested, giving a sufficient time before the
date thereof
to
comply
with
any
applicable law
or
statute but,
in no
event,
less
than
30 days before
ex-
piration or cancellation is effective. The cost of
insurance shall be included in Operator's monthly ser-
vice fee..
5. INDEMNIFICATION AND HOLD HARMLESS
(a) Operator shall save, keep, hold harmless and defend
City, its officers and agents from all claims, com-
plaints, damages, costs or expenses in law or equity
that may,. at any time, arise or be set up because of
damages to property, or of personal injury received by
N
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reason of, or in the course o, performing work which may
be caused by any wilful or negligent act or omission by
Operator, or
subcontractors.
any of Operator's employees or
6. WORKERS' COMPENSATION INSURANCE
(a) Operator shall comply with Section 3800 of the Labor
Code by securing, paying for and maintaining in full
force and effect for the duration of this Agreement com-
plete Workers' Compensation Insurance and shall furnish
a. Certificate of Insurance to City. City, its officers
or employees, will not be responsible for any claims in
law or equity occasioned by failure of Operator to com-
ply with terms of this paragraph.
(b) All Workers' Compensation insurance policies shall bear
an endorsement, or shall have attached a Rider, which
provides that in the event of expiration or proposed
cancellation of such policies, for any reason whatso-
ever, City shall be notified, by Registered Mail, not
less that 30 days before expiration or cancellation is
effective. The cost of this insurance shall be included
in Operator's monthly service fee.
7. EXTRA WORK
(a) When City determines that required work is not covered
by the monthly service fee, it shall be classified as
"extra work." If the price for extra work is not cover-
ed in the Proposal Form and cannot be agreed upon, City
will pay for extra work based on the accumulation of
costs of labor, materials, tools and equipment, plus a
158 markup for all overhead and profit. Vendor's
invoices shall be submitted with each request for pay-
ment. Operator shall not proceed with any "extra work"
unless and until cost estimates have been prepared and
authorized by City.
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8. AUTHORITY OF OTHER AGENCIES
(a) All well heads and production facilities are located in
the County of Orange, and the operation, at all times,
will be subject to the rules and regulations of the
County of Orange Environmental Management Agency.
(b) All oil reservoirs are located in tidelands under the
Pacific Ocean, and the operation, at all times, will be
subject to the authority of the State Lands Commission
of the State of California.
IN WITNESS WHEREOF, the parties hereto have executed this
AGREEMENT on the date first above written.
ATTEST:
City Clerk
APPROVED AS TO FORM:
City Attorney
RDG /dt
AGB /Qil
CITY
CITY OF NEWPORT BEACH
By:
Mayor
OPERATOR
SAMPSON OIL COMPANY
By:
Renick Sampson
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NOTICE INVITING PROPOSALS
Sealed proposals for the operation of 16 oil. wells and related oil
production, and storage facilities owned by the City of Newport Beach,
will be received at the office of the City Clerk, 3300 Newport Boulevard,
Newport Beach, CA 92663 until 10:00 A.M. on the 11th day of January, 1984
at which
time such
proposals shall
be opened
and read.
® The
facilities
are located in
the area
commonly known as "West Newport,"
and north of Pacific Coast Highway.
The term of the proposal will be two years. The proposal will relate
only to oil field operations, and will convey no rights to the operator
other than compensation for work performed. Other terms and conditions will
be as set forth in the Request for Proposal, together with such additional
terms and conditions as may be deemed necessary or appropriate by the City
Council to fully protect the interests of the City of Newport Beach. The
proposal shall specify the monthly service fees to be paid to the operator
for the duties required to be performed pursuant to the agreement.
The award of the operating agreement will be made to the lowest
responsible bidder, as determined by the City Council of the City of Newport
Beach.
Qualified prospective bidders may obtain one set of bid documents at no
cost at the office of the City Clerk, 3300 Newport Boulevard, Newport Beach,
CA 92663.
,For further information, call Robert Dixon at 640 -2221.
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ON
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CITY OF NEWPORT BEACH
UTILITIES DEPARTMENT
PROPOSAL FORM
To the Honorable City Council
City of Newport Beach
Io3300 Newport Boulevard
P..0. Box 1768
Newport Beach, CA 92663 -3884
Gentlemen:
`..1
The undersigned declares that he has carefully examined the site and the oil
production facilities, has read the Request for Proposal, and hereby proposes
to furnish all services and do all the work required to operate and maintain
the oil production facilities in accordance with the Request for Proposal,
and will take in full payment therefor the following prices for the work: .
1. Operate and maintain the City owned oil production facilities for a monthly
service fee of $_4,300.00 per month.
2. Provide requested extra engineering work for an hourly rate of
$-5o. no per hour,. not to exceed $400.00 per day.
3. Provide requested extra administrative and office work for an hourly
rate of $ n.no per hour.
PVe"ary 7,
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Authorized, S gnature
301 Ultimo Long Beach, Ca. 90814
Address
213 498 -3797
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