DOE Begins Seeking Independent Assessors to Assist in Estimating Value of Elk Hills Petroleum Reserve

Washington, DC - The Department of Energy (DOE) today began seeking qualified experts to assist it in establishing a minimum sales value for its portion of the Elk Hills Naval Petroleum Reserve. The action is the Government's next key step in divesting the Federal share of one of the largest oil and natural gas fields in the United States.

In today's (October 2)Commerce Business Daily, DOE is formally requesting qualified experts to indicate their interest in assessing the value of the Federal share of the Elk Hills field.

Under the 1996 statute authorizing the Department to sell the oil and gas field, located near Bakersfield, CA, DOE must retain "the services of five independent experts in the valuation of oil and gas fields to conduct separate assessments" of the value of the United States' interest in Elk Hills. The statute requires DOE to use the assessments in setting the threshold for acceptable bids when it formally offers the field for sale next year.

DOE also anticipates announcing its preliminary sales strategy for the divestiture within the next one to two weeks and will likely hold public meetings to advise prospective bidders and others of its plans to sell the property. Sale of the government's majority portion of the Elk Hills field, which is owned jointly with Chevron U.S.A. Production Co., is likely to be one of the largest Federal divestitures ever carried out.

In its Commerce Business Daily notice, DOE asked that companies send "expressions of interest" to the Department no later than October 22, 1996.

DOE said that to qualify for the assessment effort, companies must operate in the United States. To attract the most capable firms, DOE is also requiring respondents to have participated in at least one domestic or international oil or natural gas field valuation with a total assessed value of at least $100 million since January 1, 1993.

DOE said it would accept teaming arrangements if at least one team member met the qualifications. Individuals or companies selected to carry out the Government assessments also will be precluded from assisting or advising bidders in the actual sale of the Elk Hills field until the sale is final.

Expressions of interest must describe the respondent's business size, structure, and any teaming arrangments. DOE is also asking each respondent to briefly describe the property assessments in which it has performed a significant role since January 1993, including any done for the United States that assessed the value of federally-owned oil, natural gas, mineral or other interests.

The statute also requires the five independent assessors to estimate the cost of any environmental restoration and remediation necessary at the Elk Hills reserve. Therefore, DOE also is asking respondents to describe their experience in the last five years in carrying out restoration and remediation assessments for oil and natural gas producing properties.

Within about two weeks after receiving the expressions of interest, DOE will notify the top qualified respondents and ask each to provide additional details on its qualifications. DOE then will select firms for negotiations with the intent of awarding five contracts.

DOE expects to have the five assessors under contract in early 1997. The assessments are scheduled to be completed by September 1997. DOE has set a target date of December 1997 to determine the high bids for the property and to complete the divestiture in accordance with the statututory sales deadline in February 1998.

For more details, interested respondents should contact Mike Whisler, U.S. Department of Energy, at (202) 634-4510.

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