The CEO of California Resources Corp. (CRC), the state’s largest independent, said Gov. Gavin Newsom may push for more oversight of the oil and gas industry, but more stringent rules unlikely would be onerous.
Newsom, who recently called for additional regulations of state oil and gas operations, is a “thoughtful guy who isn’t going to take knee-jerk positions,” CRC CEO Todd Stevens said during the second quarter conference call on Thursday.
The governor also recently fired the head of the Division of Oil, Gas and Geothermal Resources over conflict-of-interest issues, but that’s a separate incident, Stevens said.
"The governor is a man of his word, and he has said he wants to tighten the regulations,” said the CEO. “We don't know what that will entail, but we're in frequent contact with him or his staff, and we have talked about many things, including legislation. He is going to do what he thinks is in the best interest for California."
CRC, which produced 129,000 boe/d during the second quarter including 79,000 b/d oil, has 10 rigs in operation now.
The industry's "day-to-day production is vital to the state's economic vitality since we're sending billions of dollars overseas to places that don't have the same environmental laws and protections as we do,” Stevens said.
California now imports around 70% of its oil. The state has "thoughtful leaders" who realize that hydrocarbons provide more than transportation fuel. “They impact our personal lifestyles,” Stevens said.
Net income was $12 million (24 cents/share) in 2Q2019, compared with a year-ago loss of $82 million (minus $1.70).