Using LP for Crude Oil Sales at Elk Hills: A Case Study

The Naval Petroleum Reserves in California (NPRC), made up of NPR #1 (Elk Hills field) and NPR #2 (Buena Vista field), are some of the major sources of crude oil in the United States. Current estimates of remaining recoverable reserves in the NPRC exceed one billion barrels. Over 90% of the NPRC reserves underlie the Elk Hills field. At current prices, this represents an asset value of over $18 billion. This paper will discuss the bid and evaluation procedures as applied to crude oil sales at Elk Hills only.