One company owns every pipeline from its California oil platforms to refineries
The Santa Ynez unit spans 76,000 acres and puts extraction, processing, and transport under one owner.
Yet Another Value Podcast · Kontrarian Korner's Ben Kelleran on Sable Offshore $SOCSable Offshore, which took over the Santa Ynez field off California from ExxonMobil, owns every step that moves oil from three platforms to refineries.
The holding covers 76,000 acres, or about 118 square miles, and includes three fixed platforms, structures bolted to the seafloor that stay in place for decades, according to Ben Kelleran, an investor who follows the company.
Kelleran says crude from those platforms travels through roughly 11 miles of pipeline to an onshore processing facility, then through 100 to 110 miles of pipeline to where it is sent to refineries. In his words, the company owns "the whole process from pulling it out of the ground to sending it off."
Kelleran says Sable is already producing oil and filling that onshore facility. It is waiting for California's state fire marshal, who must sign off that repairs and tests are done before full operations can begin.
Questions people ask
Why would ExxonMobil give up the field?
ExxonMobil told Sable it would take Sable equity and financing to hand over a field that had been shut for seven years. Kelleran argues the field did not move the needle for a company of Exxon's size, and that staying in California could expose its wider operations to California rules.
What is the difference between producing oil and full operations?
Producing oil means crude is coming up and filling tanks at the onshore facility. Full operations means oil is flowing continuously through both pipelines to refineries for sale, which Sable still needs regulatory approval to do.
How long could these platforms keep producing?
Kelleran calls the geology low decline with a long reserve life, and points to estimates of 50 to 70 years of reserves. That long life is central to his argument that the field can produce steadily for decades once restarted.