NEW YORK, Oct 14 (Reuters) - A California judge on
Tuesday sided with the state government and tentatively ruled
against Houston-based oil company Sable Offshore's ( SOC )
request to restart a pipeline that pulls crude from the Santa
Ynez offshore oil project.
The tentative ruling from Judge Thomas Anderle in the
Superior Court for Santa Barbara County marks a major setback
for Sable, whose business is entirely focused on the Santa Ynez
project. Its shares fell over 20% to about $14 each in extended
trading.
The company in May restarted production from one of the
three offshore platforms in that project, nearly a decade after
it was shut due to an oil spill under previous owner Exxon Mobil ( XOM )
.
Sable also repaired the Las Flores subsea pipeline that
pulls crude from the offshore platform, in the hopes of selling
the oil to refiners in the state, but the California Coastal
Commission blocked its restart citing issues with Sable's
permits.
Sable petitioned the Santa Barbara Superior Court and argued
the Coastal Commission did not have the authority to issue the
cease and desist order. However, the company failed to meet its
burden to prove the commission had abused its discretion,
Anderle wrote in his tentative ruling.
Anderle will hold a hearing on Wednesday before finalizing
the decision.
Meanwhile, Sable is expected to change strategies for
marketing the crude oil from the Santa Ynez platform. The
company last week said delays in the restart of the Las Flores
pipeline system will make it fully pivot to using tankers to
shuttle crude from Santa Ynez instead of the pipeline.
Sable has sought support from the federal government for the
tanker pathway and last week submitted an updated development
and production plan for Santa Ynez detailing that route to the
U.S. Department of the Interior's Bureau of Ocean Energy
Management, the company said in its filing.