The state’s largest oil producer announced Monday it has agreed to pay $63 million for a group of assets that includes a critical pipeline whose closure Dec. 1 effectively cut off Kern County oil fields from Bay Area refining.
Long Beach-based California Resources Corp., a major player in Kern County oil production, said the purchase of about 2,000 miles of pipeline capacity from Denver-based CorEnergy Infrastructure Trust Inc. is expected to close by Oct. 1.
Besides the 373-mile, 235,000-barrel-per-day San Pedro Bay Pipeline that leads to the PBF Energy Inc.’s 157,000-barrel-per-day refinery in Martinez near San Francisco, CRC’s acquisition of Crimson Midstream Holdings LLC would include the SoCal Pipeline Network, IVEC Line and the KLM Pipeline. Together, those conduits can transport up to 400,000 barrels of crude per day.
On June 16, CRC asked the California Public Utilities Commission for permission to buy some of the assets. Staff at the CPUC have recommended allowing the purchase to proceed. A vote on the matter is set for Thursday.
CRC’s intention to buy the San Pedro Bay Pipeline was first reported by The Californian early last month. The deal has been viewed within the state’s oil industry as a potential lifeline that could help local producers avoid price discounts they see as resulting from a limited pool of buyers.
Assuming the purchase receives final approval, local oilman Chad Hathaway said he’s looking forward to seeing how CRC’s ownership of the San Pedro changes the so-called differentials that have lowered prices paid to independent producers like him.
“I’m very loyal to my current refiner, but I’m definitely going to wait and see what happens to the differentials,” he said by email Monday.
CRC already owns and runs a network of small pipelines, but none of them leads to a refinery.
The company said in a news release Monday that the purchase would strengthen its position as the state’s leading integrated infrastructure energy platform.
“This diversified midstream network will enhance our ability to efficiently deliver California-produced barrels directly to the highest-value markets while increasing operating flexibility and flow assurance across our portfolio,” CRC President and CEO Francisco Leon said in the release.
CRC added that owning Crimson would improve its ability to move crude across California safely and efficiently while also increasing its operating flexibility and opening third-party transportation opportunities.
It noted that the deal would give Central Valley independents and other oil producers reliable access and options, “reducing exposure to constrained outlets and pricing discounts while supporting California jobs, royalty revenues and the reliable delivery of locally produced energy.”
An executive at Crimson said last month the company retained employees who worked at the pipeline after last year’s closure so it can quickly resume operations. He could not be reached for comment Monday.
CRC has said it plans to continue running the pipeline as a common carrier “in the same manner they are operated today.” It added that customers who have paid to have their oil transported on the pipeline “should not expect any disruption in service.”
An oversupply of local oil associated with the pipeline’s closure has worsened with a recent influx of tens of thousands of barrels per day of offshore oil that is now taking up capacity on one of the major pipelines linking Kern with refineries in the Los Angeles Basin.
CRC announced the deal on the same day it posted net income of $514 million on operating revenue of almost $1.3 billion. The earnings amounted to almost three times more than CRC made in the second quarter of 2025, while its revenue was up almost a quarter, year over year.
The revenue easily exceeded analysts’ revenue expectation, but the earnings missed forecasts by at least 24%.
CRC said its average production in the three months ended June 30 came to the equivalent of 149,000 barrels of oil per day, down a little more than 3% from the first quarter of this year.