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A recently released audit conducted over FY2012 revealed that oil production levels and their corresponding tax purposes were both relatively complete and reliable.

Per Long Beach Municipal Code, oil producers pay two separate taxes for each barrel of oil produced: a business license tax that amounts to 15 cents and a Police/Fire Public Safety tax of 28. From Long Beach’s 19 oil producers–two of which, TOPKO and THUMS in the Wilmington Oil Field, produce 94% of our oil–some 12.4 million barrels of oil were produced, generating in return $5.3 million through the required remitting of taxes. 

Generally speaking, three departments oversee oil production: Department of Gas & Oil (GO), which monitors the production of oil producers and independently verifies barrel numbers with its two major producers, TOPKO and THUMS; the Development Services Department, which issues well permits, inspects wells, and maintains a well database; and the Financial Management Department, which handles and receives the self-reported information and tax payments from oil producers.

According to City Auditor Laura Doud, the oversight practices engaged by the GO with TOPKO and THUMS resulted in sound numbers.

Gas & Oil staff is present whenever run tickets–values of oil recorded at the time of extraction–are ran off, then individually confirmed between GO staff, the oil producer, and the oil buyer until all parties agree. These are then compared to the self-reports submitted by TOPKO and THUMS.

It was noted that the run tickets ran at the three other oil production sites which account for the remaining 6% of oil production are verified by GO, but not reconciled as they do with TOPKO and THUMS. Doud noted that assessing the cost of measuring these 17 companies in the same manner as TOPKO and THUMS would have to be compared to the benefits received were they to do so.

Read more:

Oil Production Final Report, August 2013