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HomeMy WebLinkAboutMinutes City Council - 10/29/1965 - SpecialMINUTES CITY OF CORPUS CBRISTI, TEXAS SPECIAL COUNCIL MEETING October 29, 1965 4:30 p.m. PRESENT: Mayor McIver Furman Mayor Pro Tem Jack R. Blackmon Commissioners: Dr, P. Jimenez, Jr. Ken McDaniel Ronnie Sizemore Wm. H. Wallace City Manager Herbert W. Whitney Assistant City Attorney Bob Young City Secretary T. Ray Kring Mayor McIver Burman called the meeting to order, and announced the purpose of the special meeting was to receive and take whatever action is warranted on an agreement between the City of Corpus Christi and British - American Oil Producing Company, and to transact any other business that may come before the Council for action. Commissioner Patrick J. Dunne was absent. John Brooke, attorney for British -American Oil Producing Company, stated that said company had been negotiating with the Bay Drilling and Platform Com- mittee to work out an agreement under which it could continue to operate in the Bay, and which would adequately protect the City in the use of the Bay by the public, He further stated that British -American Oil Producing Company had reached an agreement, both with the Committee and with the City Attorney's office, rela- tive to the contents of such an agreement, and outlined the provisions as follows: 1. That the City of Corpus Christi would allow British -American Oil Pro- ducing Company to complete its present well in State Tract No, 12 in a conventional manner rather than below -the -mud completion or other untried types of completion; 2, That British -American Oil Producing Company would not drill any wells in the so-called "no man's land" in front of the City of Portland, and that British - American Oil Producing Company would drill no wells within one mile of the shore- line of the Bay unless the City adopts an ordinance that prescribes a lessor distances 3. That the City of Corpus Christi agree that British -American Oil Pro- ducing Company owes the City no fine for its drilling of the well in State Tract No. 12, and that the City waive any action it might have against British -American Oil Producing Company, and that the City agrees that British -American Oil Com- pany has complied with the terms of the early letter agreement; Minutes Special Council Meeting October 29, 1965 Page 2 4. That the City will agree to grant British -American Oil Producing Company permits for three additional wells to be drilled in a cluster in Block 24 of State Tract 24, Corpus Christi Bay; located approximately 650 Feet from the Northwest line and 1900 Feet from the Northeast line of said block; 5. That the foregoing proposals would be subject to British -American Oil Producing Company securing the required drilling permits from the Railroad Com- mission and Corps of Engineers. In answer to a question from City Manager Whitney relative to the location of the three clustered wells, Mr. Brooke advised that the clusters would be so that the wells would be no farther than 250 Feet from each other, and the center of the cluster would be separated by at least one mile of open water or such distance that the City by ordinance would prescribe. Mk. Brooke read the proposed agreement between the City of Corpus Christi and British -American Oil Producing Company, Mayor Pro Tem Blackmon stated that British -American Oil Producing Company was asking that the City give a permit to them and let them complete the well, and Mr. Brooke stated that in return "no man's land" would be given back, and future wells would be drilled in clusters, Mayor Pro Tem Blackmon asked questions relative to Paragraph (5), and Mr. Brooke advised that if the Railroad Commission, Corps of Engineers, or some other body blocked British -American Oil Producing Company from drilling, then the agree- ment would be null and void. Mayor Pro Tem Blackmon stated that he was not in favor of Paragraph (3) that the City not take any court action against British -American Oil Producing Company; that the City is not a judicial body, and that said company was asking the City to release something, and he wanted Paragraph (3) out of the agreement completely. In answer to questions from Commissioners Wallace and McDaniel as to why he objected to Paragraph (3), Mayor Pro Tem Blackmon replied that he felt British - American Oil Producing Company should be satisfied with getting a permit, and that the City Council should not be called upon to execute a waiver or release, Minutes Special Council Meeting October 29, 1965 Page 3 Mr. Brooke advised that British -American Oil Producing Company wanted to work out something that would be a fair compromise for both the public and British - American Oil Producing Company. Commissioner Wallace asked the Chairman of the Bay Drilling and Platform Committee for his opinion. Mr. Ed Haste, Chairman of the bay Drilling and Platform Committee, stated that the Committee had not been able to agree with recommendations for British - American Oil Producing Company because it was so near the shoreline and that British - American 011 Producing Company could not feasibly complete the well below-the-mudline, and that he felt the conditions outlined represented the thinking of the Committee and would be in the interest of the general public. In answer to questions from the Council, Mr, Harte stated that he was in agreement with British -American 011 Producing Company's proposal, and would recom- mend approval of the agreement. Mr, Harvie Branscomb, a member of the Bay Drilling and Platform Committee, stated that it was his assumption that if British -American Oil Producing Company failed to obtain their permits, the City would have the right to proceed with legal action; but if British -American 011 Producing Company was able to obtain their permits, then the City would not take any further action against them on the drilling of the well in State Tract No, 12. He further stated that he felt the thinking behind the agreement was that the City settle their problem with British -American Oil Producing Company, and that he approved of the agreement, Mr. Jack Gorman, General Counsel for British -American 011 Producing Company, stated that he highly recommended the agreement, and Ms. Brooke urged the Council to adopt the agreement as submitted, Mayor Pro Tem Blackmon asked if British -American had resubmitted their ap- plication to drill in State Tract No. 12, and City Manager Whitney advised this had been done. Commissioner Sizemore stated he felt the applications should be based on merits and that four applications should not be awarded at one time, Minutes Special Council Meeting October 29, 1965 Page 4 Commissioner McDaniel stated that at an Oil Committee meeting they spent one-half day discussing clustering of wells and could not reach any agreement, and if this proposal had been before the Committee at the last meeting, he felt the Com- mittee would have approved the agreement as it is, and that the agreement conforms to what the Committee was trying to do. Mr. Branscomb stated that he felt the agreement represented the feeling of an oil company to come forward and agree to certain things in the nature of a com- he personally felt promise; and/ that it was the best way to approach a solution to this problem. Commissioner Sizemore asked the necessity of having the three other drilling applications at this time. Mr. Haste explained that about a week ago British -American 011 Producing Company had filed applications for three wells in "no man's land," and have now agreed to pull out of this, and that it represented a concession on their part as these wells could be drilled without protest from any one. In a discussion of building platforms, Mr. Baste advised that the present ordinance prohibited all platforms. Mr. Corman advised that British -American did not intend to build any plat- forms in "no man's land"; that his company recognized the City had a problem on the distance from shore; that his company was willing to spend an additional $50,000.00 and step out one mile from shore to accommodate the citizens, and that they intended to complete the well in State Tract 12. Commissioner Sizemore stated that he felt British -American Oil Producing Company was using a "lever" with "no man's land," and he objected to this. Mayor Pro Tem Blackmon stated that applicant already had permits to drill those wells in "no man's land," and asked if British -American Oil Producing Com- pany actually meant that they intended to cancel the permits for the three wells they have or use the permits elsewhere, Mr. Corman stated that applicant would have to go back to the Railroad Commission which would constitute a releasing of the present permits and receiving in place thereof the whip stock permits. Minutes Special Council Meeting October 298 1965 Page 5 Mayor Pro Tem Blackmon stated that Clause (4) actually binds the City to grant the three permits in clusters, and that he was doubtful of the wisdom of being bound by a declaration that it is the Council's intention to grant the permits for a cluster, Mr. Carman advised that as soon as British -American Oil Producing Company can complete the necessary paper work, the applications would be forwarded to the City Manager's office, and that he was asking the Council to agree to grant the permits. Commissioner McDaniel asked if British -American Oil Producing Company wanted the Council to commit themselves to granting the permits, assuming they are in order; and Mr. Carman replied that if British -American Oil Producing Company complied, they were asking that the permits be granted. Mr. Branscomb advised that although he had not had time to study the agree- ment, it was his understanding that British -American Oil Producing Company would be expected to comply with safety precautions and other types of regulations. Mr. Harte stated that British -American Oil Producing Company had made some concession in the public interests and that although it was not a perfect agree- ment, he felt the agreement represented a forward step, Commissioner Sizemore read a communication from British -American Oil Pro- ducing Company stating what they agreed to do, and advised that said company had not complied. Motion by Wallace, seconded by McDaniel and passed, with Blackmon voting "Nay," that the agreement between British -American Oil Producing Company and the City of Corpus Christi be ratified. (Copy attached) Mayor Pro Tem Blackmon advised that a Committee report had not been received, and that he felt the people of Corpus Christi had been "had" not once, but twice, by this company, and he did not propose to give them a third chance. Mayor Furman stated that he felt the purpose of the Committee was to sit down with the other people and try to agree in some logical way with the industry, and community, and still preserve what we want for our city, and that he felt the proposal should be accepted as presented. ; Minutes Special Council Meeting October 29, 1965 Page 6 Mr. Branscomb stated that there were two methods of constructing islands; drilling bargee as proposed by British -American Oil Producing Company and the sur- rounding of man-made islands, and that there were no recommendations for or against the island proposal. Mayor Furman asked Mr. Corman if he was aware of this, and Mr. Gorman stated he was. Assistant City Attorney Bob Young stated that some changes had been made in the agreement, and asked that the agreement be rewritten. Commissioner Wallace asked Mk. Harte if the Committee had a recommendation on the Nueces Bay well, and Mr. Harte replied that the recommendation was submitted by mail September 28, 1965. City Secretary T. Bay Kring checked with the Naviga- tion District and advised this matter had been cleared with them. Motion by McDaniel, seconded by Wallace, and passed that R. L. Kirkwood be granted a permit to drill and operate Well No. 7A in State Tract 706, Lease No. 30427, Nueces Bay. There being no further business to come before the Council, the special meeting was adjourned. I, McIVER FURMAN, Mayor of the City of Corpus Christi, Texas, certify that the foregoing minutes, same being for the period of October 6, 1965, through October 29, 1965, inclusive, and having been previously approved by Council action, are by me hereby approved. A0444?Ul/YYt-LLI.L� McIVER FURMAN, Mayor City of Corpus Christi, Texas THE BRITISH -AMERICAN OIL PRODUCING COMPANY Lafayette, Louisianan 705O5 Mayor and City Council City of Corpus Christi Corpus Chrieti, Texas Gentln October 29, 1965 Reference ie he de for ail purposes to a Letter Agreement dates September 30, 1965, eaeauted by The Rritieh-American 011 Producing Company and by I. M. Singer, City Attorney, relative to a well then drilling on State Tract No. 12s Corpus Cbrieti Say, at a location 660 feet from the Eget line and 660 feet from the South line of said State Tract No. 121 being the eame agreement which was later ratified by the City Council of the City of Corpus Christi en October 6, 1965. Since &ptember 30, 1963, the well boo continued to be drill Now, therefore, in consideration of the above, The City of Corona Christi and The Dritieh+American 011 Producing Company have agreed and do hereby agree as follows: 1. The City of Corpus Christi agrees tc 1,B ue to Britian. Amertoan a CriliSng and Production Permit for ite State Tract No. 12 No. 1 Well by the terms of which Permit, The Sritiah-American Oil Producing Company may complete such well in a conventional manner with a well control structure not to exceed more than 61 in height above the surface of the water of the bray with 4 caisson type enclosure. a. Sritieh-American agrees that it will not locate any surface etructuree in that portion of State Tracts dos, 12, 25 and 26 outside of the corporate limits of Corpus Christi, Tease, herein.. after referred to as "nn men's land", in Such manner that they would violate the ordinances of this city if the "no man' e _land" were within the corporate limits of the City, and further that the surface location of any future well drilled, in Corpus Christi Bay will pot be closer than one mile from ehere (or seen lesser average distance from Chore as the City may by ordinance preseribe)s and will locate any Own wells drilled in clusters with no well further than 2500 from each other, the center of which clusters shall be separated by at least one mile of open water, or such other die- tanoe ae the City may by ordinance preeoribe. 3. The City of Corpue Christi agrees that The British, Ameriean Oil Producing Company owes no fine to the City of Corpus Christi for the drilling of State Tract No. 12 No. 1 Well; and the City of Corpus Christi waives any and all eauaeo of action, either legal or equicAblo, that it may have aga4net The British, Antillean Gil Produell Ccarly for the drilling q? Said well at its location,and in to realer drilled and agrees that The British- Ameriean 011 Producing, Cowpony hae complied in all respects with its Letter Agreement 0Z September 30, 1965. 4. The City of Carpue Christi agrees upon The British- . American Oil Producing Companyle filing the neceeeerY applications and supporting data to grant to British -American three well permits in a:cluster looated apprOximately 650' from the northweat line and 1900' from the northeaet line of Block 24 of Stat“ract No. 24, CorOna Chrieti Bay, which locations it is underetood Will be utilized by Britieb,American as surface locations to nh1p stock said wells to locations within the "no man0e land" above mentioned'. 5. All of the foregoing ie eubjeot to'llho.:British-American Oil Producing Company beIng able to eecure any and4LI1 required per - mitt for,the drilling Of the above mentioned weliivfrect the United Statea.COrp:Of Englneereotexas Railroad Commletion and the 011 and gas leasee holding the, lease on veld Ceetlon 24 and any other permits from political bodies or jeriedictions asserting authority thereof. If 2rit101104tmerlean le unable to obtain said permits and agreements, -2- this agreement will not bo binding on either party. This Letter Agreement and the Permit issued to The 8ritieh-Amerioan 011 Producing Compri r on 'this day in all respeate supereede the Letter Agreement of September 30, 1965, and shall be binding on the parties hereto, their suooessor8 and assigns. The aoknowled yl. ant of the undexntandinga set out in thle letter are stated below. APPROVED AND AGREED The THE CITY OF CORPCHRISTI THE BRITISH.ANERIOAN on. PRODUCING COMPANY HN C. BROOKE ORNEY FOR THE BRITISH -AMERICAN PRODUCING COMPANY qm4m,11,, RATIFIED by the CITY COUNCIL OF THE CITY OF CARPUS CHRISTI, TEXAS, at ite epealal waled meeting on Friday, October 1965. itih STATE OF TEXAS COUNTY OF NUECES . NOTICE OF SPECIAL MEETING CITY OF CORPUS CHRISTI TO THE MEMBERS OF THE CITY COUNCIL, THE CITY MANAGER, THE CITY SECRETARY AND THE CITY ATTORNEY TO THE CITY OF CORPUS CHRISTI, TEXAS: NOTICE is hereby given that a special meeting of the City Council of the City of Corpus Christi, Texas, will be held in the City of Corpus Christi, Texas, in. the Council Chamber of the City Hall, at 3 0 o'clock, M., on the day of , 1965-, for the purpose of receiving and taking whatever action is warranted on an agreement between the City of Corpus Christi and British - American Oil Producing Company, and to transact any other business that may come before the Council. DATED this the of 196 d . 4/(1 klit �.�fiLtivtaa�✓ MC IVER FURMA.N, Mayor City of Corpus Christi, Texas CONSENT TO MEETING We, the undersigned members of the City Council, the City Manager, the City Secretary and the City Attorney to the City of Corpus Christi, Texas, hereby accept service of the foregoing notice, waiving any and all irregularities in such service and consent and agree that said meeting shall be at the time and place there- in named and for the purpose therein stated. JACK R. BLACKMON AThICK J. DUNNE KEN MC DANIEL 1 em,get . RO `f ORE WM. H. WAL le/j „ 41101P" HERBERT W. WaLITNEi City Mana4er ey . RA City cretary