Sable Offshore pursuing alternative shipping plan in federal waters as onshore pipelines remain tied up in court proceedings
SANTA BARBARA COUNTY, Calif. (KEYT) – On Monday, Sable Offshore informed investors about the current status of its plans to restart oil production in Santa Barbara County sharing that it is actively pursuing a shipping strategy in federal waters.
In Sable's latest 8K filing with the U.S. Securities and Exchange Commission, it shared with investors that it has not made additional capitol investments into onshore facilities and pipelines outside of ongoing court proceedings, but the Houston-based energy company has made investments into an alternative plan to move crude oil from offshore platforms in federal waters using transport vessels.
In September of last year, Sable Offshore submitted a Request for Approval of Restart Plans to the California Office of State Fire Marshal.
The state safety regulator found that there were still outstanding steps required before approving restart the following month, but Sable also announced at the same time that it was pursuing an alternative transportation plan using treating vessels that would transport crude oil directly from offshore platforms.
"Since beginning the OS&T Strategy, we have curtailed substantially all capital expenditures relating to the Santa Ynez Pipeline System other than applicable legal expenses," shared Sable Offshore with investors Monday. "As soon as commercial sales through the Santa Ynez Pipeline System become available, we expect to pursue such onshore sales, which would require incurring such curtailed Santa Ynez Pipeline System capital expenditures, in addition to the OS&T capital expenditures discussed here."
In response to the State Fire Marshal's decision regarding onshore pipelines in October, Sable Offshore announced that it had determined that the pipelines connecting the Santa Ynez Unit to Pentland Station in Kern County are technically interstate pipelines under the Pipeline Safety Act and requested that the U.S. Department of Transportation's Pipeline and Hazardous Materials Safety Administration take over its restart plans involving the pipelines.
The Pipeline and Hazardous Materials Safety Administration argued that the restart plans were subject to emergency permitting based on a national energy emergency declared by President Trump last year which could bypass normal regulatory steps.
"Sable stated that expedited review of its application was warranted in light of the national energy emergency declared by the President under the National Emergencies Act in Executive Order 14156," announced the Department of Transportation when issuing the emergency permits to Sable Offshore. "This emergency special permit allows Sable to operate Lines CA-324 and CA-325 without being subject to the requirement to evaluate and remediate corrosion of or along a longitudinal seam weld within 180 days."
According to a previous 8-K filing with the U.S. Securities and Exchange Commission, the U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration informed Sable that it had approved its restart plans for Line CA-324 and Line CA-325 on Dec. 22, 2025.
Line CA-324, formerly known as Line 901, has remained dormant since it ruptured, causing the 2015 Refugio Oil Spill which impacted 150 miles of California coastline and destroyed thousands of acres of shoreline habitats.
Days later, environmental advocacy groups filed an emergency lawsuit seeking to block the approval, but the federal court declined to issue a stay on federal approval of restart plans.
Despite the decision to not immediately halt the restart process, the court did grant that the lawsuit would receive expedited processing and during court proceedings in early January, legal representatives of Sable Offshore admitted that oil production had not restarted at offshore and onshore pipelines, opening the onshore pipelines up to a recently implemented state law.
The new state law, SB 237, signed into law in September of 2025, would require Sable Offshore to request a coastal development permit among other steps from the California Coastal Commission to conduct any, "Repair, reactivation, and maintenance of an oil and gas facility, including an oil pipeline, that has been idled, inactive, or out of service for five years or more".
Those specifications only apply to idle onshore pipelines in Santa Barbara County.
"Ever since a catastrophic oil spill at Refugio Beach in 2015 led to a court-ordered consent decree, CAL FIRE - Office of the State Fire Marshal has been responsible for overseeing the repair of the lines that caused the spill, which are now operated by Sable Offshore Corp in Santa Barbara County," shared Daniel Villaseñor with the California Natural Resources Agency.
Despite those attempts to supplant state regulators with federal ones and arguments in federal court that offshore and onshore pipelines are inherently connected and already active, Sable Offshore still has its alternative plan to completely remove state authority by shipping crude oil from offshore platforms.
On Oct. 9 of last year, Sable submitted an updated Development and Production Plan to the U.S. Bureau of Ocean Energy Management, a key regulatory hurdle to begin shipping crude oil from offshore oil platforms in the Pacific Outer Continental Shelf Area.
"Continued delays related to the Santa Ynez Pipeline System have prompted Sable to evaluate and pursue the OS&T [Offshore Storage and Treating] Strategy," stated Sable Offshore in its latest 8K filing Monday. "In connection with implementation of the OS&T Strategy, the Company expects to opportunistically acquire an existing OS&T in the first quarter of 2026, with delivery of the vessel to SYU expected in the third quarter of 2026."
The decision to ship crude oil from an offshore tender in federal waters to an out-of-state or even international destination would bypass the authority of the Office of State Fire Marshal confirmed the state-based emergency response agency in October of last year.
"Following the acquisition of the vessel, and vessel and platform upgrades and installation, Sable would expect to begin sales from all SYU platforms in the fourth quarter of 2026, with expected comprehensive oil production rates of over 50,000 barrels of oil per day, utilizing the OS&T within the SYU federal leases, provided the Company receives regulatory clearances," continued Sable Offshore in its Feb. 2, 2026, filing with the Securities and Exchange Commission. "Sable estimates that the total capital required to execute the OS&T Strategy is approximately $475.0 million. The Company has already incurred a small portion of such capital expenditures, with the vast majority of such capital expenditures remaining, provided the Company receives regulatory clearances."
Sable's interest in getting oil to market isn't just tied to a return on those investments with it's investors, Sable's purchase of the entire oil-generating infrastructure from ExxonMobil back in February of 2024, has a crucial deadline.
Court documents revealed that Sable secured a $622,000,000 loan from Exxon to fund the purchase of the local oil production infrastructure which has a stipulated deadline where ownership would revert back to ExxonMobil unless oil from the Santa Ynez Unit under Sable's management enters the market.
On Nov. 3, 2025, Sable was able to extend that maturation deadline to March 31, 2027, the extension also included an increased interest rate from ten percent to 15 percent per annum, and requires the Houston-based energy company to retain no less than $25 million in unrestricted cash each month.
Your News Channel reached out to Sable Offshore and its representatives with specific questions about the offshore shipping plan as well as ongoing litigation and the company declined to answer those questions Wednesday noting that other outlets have covered the 8K filing.
