Crisis Revives Oil Industry : Business: Though production is rising, few expect a return to the county’s petroleum heydey.

Ventura County’s oil industry isn’t ready to declare the return of the boom times of the past, but the pace has quickened perceptibly for some of the county’s production and oil field service companies since upheavals in the Middle East sent prices zooming upward.

“We’re calling in more crews to increase production in some wells and to bring others that were marginal back into production,” said Murdock Baker, vice president of Seneca Resources Corp. of Santa Paula.

He said he hasn’t yet expanded his payroll of about 35 employees, but has contracted with other companies that supply crews for this type of work.

“I have no doubt but that more people are working in the fields now than two months ago,” Baker said.

Before Aug. 2, when Iraqi President Saddam Hussein’s forces invaded Kuwait and triggered an embargo of those countries’ exports, Seneca was receiving about $11.65 a barrel for the oil pumped from its 150 wells in the northern part of the county.

In the past week, the price for that same California light crude had risen to $32.35--not as much as the record amounts being paid for West Texas crude, but enough to arouse renewed interest in Ventura County wells that were idle as recently as two months ago.

Oil from the Ventura Avenue/Rincon Field, which is slightly heavier than that produced in the northern part of the county and therefore more costly to refine, was selling at $30.60 during the week.

“In May, June and July, when oil dropped to $11 a barrel, we shut down any wells that needed major repair work,” Baker said. “You couldn’t justify the expense. Now, some of that work is worth doing.”

Illustrating how narrow profit margins had become, Carol Currie, a spokeswoman for the California Independent Petroleum Assn., said it costs a producer $8.50 to $9.50 to get a barrel of oil--equaling 42 gallons--out of the ground. Others in the industry say the cost is actually about $15 when financing and other expenses are taken into account.

Seneca, in normal times one of the county’s most active exploration companies, is gearing up for recompletions--drilling old wells into deeper zones--in its prime production areas, the Sespe Field north of Fillmore and the Silver Thread Field between Santa Paula and Ojai.

Bill Hewston, president of Measurement & Control Engineering, an oil field service concern based in Ventura, said most of his 33 employees are working overtime, testing wells that previously were shut down but now are being readied for reactivation.

But, like most other oil people in the county, Hewston hesitates to predict that the improvement in business will be long-lasting.

“We’re seeing a little increased activity, but nobody is jumping out and attempting to sign new leases,” he said. “These prices will have to stabilize more than they have before that happens.”

Hewston said any increased activity among oil field developers before the end of the year will probably be limited to “small outfits that can adjust their plans and budgets more easily than the majors can.”

Others in the industry said it could take as long as six months before prices are considered stable enough to warrant widespread expansion or exploration.

One small company, Fortune Petroleum Corp., based in Agoura Hills, is so confident about the future that it has signed a letter of intent to buy the oil and gas properties of a Ventura producer, Fairbanks & Haas Inc.

The deal would double the production of Fortune, which now pumps 140 barrels a day from 28 wells near Fillmore and Piru.

Dan Pasquini, Fortune’s president, plans to drill for even more oil on 13 of his present locations that he says are proved but undeveloped. He expects to finance the move in two to three months when he believes prices will have stabilized.

“We were barely breaking even before Kuwait,” Pasquini said. “Now, we’re making a net profit of $60,000 a month.”

While small companies such as Fortune are flourishing, neither Texaco nor Chevron said they plan to reverse decisions that recently reduced their staff operations in the county.

“The price increases have improved the picture for our production in the Ventura Avenue Field, but essentially we haven’t changed our plans at all,” said Mark Weller, Texaco’s West Coast offshore manager.

Along with Exxon, Arco, Chevron, Unocal and others, Texaco is a major offshore producer from platforms along the Ventura and Santa Barbara coastline.

Most of these offshore wells are already pumping at full capacity, though their production conceivably could be stepped up if they were drilled to deeper levels.

Such steps aren’t likely to be taken, said G. Michael Marcy, a spokesman for Chevron’s Ventura district operations.

“Small companies can realize economies by boosting production quickly from, say, 100 barrels to 300 barrels a day,” he said. “Because of the huge investment required, the majors are less prone to make such a decision.”

Marcy doesn’t expect current developments to help resolve an environmental controversy that has held up production at offshore fields at Point Arguello in the Santa Barbara Channel. Chevron and its partners have invested $2.5 billion there but haven’t produced a drop of oil.

As for the future of Ventura County oil, Marcy said he thinks its aging fields are “pretty much tapped out.” Noting that his own company has sold all its onshore holdings in the county, he added: “There will always be an oil industry here, but the heyday of Ventura County oil is over.”

Bob Baldwin, acting superintendent of Cal Pacific Drilling Co. in Camarillo, said he expects the price for benchmark West Texas intermediate crude to stabilize in coming months at about $25.

That would be about $15 below present levels and would translate to about $18 a barrel for oil produced in northern Ventura County. Pasquini said he thinks the north county price will settle at $20 to $25 a barrel.

Pat Kinnear, deputy supervisor of the California Division of Oil and Gas, estimates that there are about 2,500 producing oil wells in Ventura County, of which 900 pump fewer than 10 barrels a day. About 300 others have been shut down since oil prices tumbled badly in the mid-1980s.

Nobody is predicting that prices will climb so high that all the capped wells will be reactivated.

So many people have left the industry that it would take years to train the workers needed for a major comeback, some experts said.

Bill Hewston, 53, who has lived in the county all his life, remembers when “there was no question but that the top industries in this county were oil and agriculture.”

Farming has held its own, Hewston said, but the same can’t be said for oil.

“As recently as 15 years ago, oil companies paid 50% of this county’s property taxes,” he said. “Today, I doubt if oil accounts for more than 5% of the tax base.”

MONDAY: President Bush banned new oil leases off 99% of the California coast until the year 2000. With the threat to U.S. oil supplies from the Persian Gulf, should new oil drilling be allowed off the California coast? See Q&A; Monday on B2.