California judge sides with government in Santa Ynez pipeline dispute (updated)

Sable Offshore

15/10/2025 05:59

Updates with Sable's response in paragraphs 4 to 6; adds share movement in paragraph 2; changes dateline to October 15

By Shariq Khan

NEW YORK, Oct 15 (Reuters) - A California judge on Tuesday ruled against Houston-based oil company Sable Offshore's SOC.N request to lift the state's cease and desist order on repairs it had made to an onshore pipeline system linked to the Santa Ynez project.

Shares of the company fell 26.4% in premarket trading.

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.

Sable said on Wednesday the ruling would not affect plans to resume petroleum transportation through the Las Flores Pipeline System or production from the federal Santa Ynez Unit.

However, the company intends to appeal if the Santa Barbara Superior Court adopts the ruling, it said.

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.N.

Sable also repaired the Las Flores onshore pipeline system that receives crude from Santa Ynez, in the hopes of restarting the line and selling the oil to refiners in the state.

However, since last year, the California Coastal Commission has been trying to stop Sable Offshore from undertaking the repairs, arguing that the company did not have the right permit for it. In April, after a public hearing, the Commission issued a cease and desist order against Sable Offshore, among other actions.

The Commission's executive director had issued two similar orders last November and in February.

Sable this year 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.

 (Reporting by Shariq Khan in New York and Katha Kalia in Bengaluru; Editing by Chris Reese and Leroy Leo)

 ((Shariq.Khan@thomsonreuters.com; Twitter/X: @shariqrtrs; Office: (646) 261-7893;))