A huge oil discovery could be on the horizon in California, The Jerusalem Post has learned.

The Golden State is already home to five of the 12 largest oil fields in the US, and the California Division of Oil, Gas & Geothermal Resources estimates that more than 35 billion barrels of oil equivalent overall have been discovered in the state so far. This is roughly equivalent to the proven reserves of Nigeria, the world’s 10th-largest oil producer.

Industry sources, including Occidental Petroleum Corporation – the fourth-largest US oil company – believe there is significant potential remaining, with more large undiscovered resources in the region.

Alon USA Energy Inc – the American subsidiary of the Alon Israel Oil Company – is in prime position to benefit financially from California’s 21st-century oil rush, an industry source said.

Alon USA is sitting in the thick of the action, with refineries in Paramount and Long Beach in the greater Los Angeles area, and a third refinery in Bakersfield, which it acquired for $32 million in 2010. Together, Alon USA’s three California refineries are operating at a throughput capacity of 94,000 barrels per day. The refineries produce and market CARBOB gasoline, CARB diesel, jet fuel, asphalt and other petroleum products.

The San Joaquin Valley, in which Bakersfield is located, is home to discoveries of about 20 billion barrels of oil equivalent and is where Alon is concentrating most of its efforts. The company said in its recent annual report that California was its “most difficult market in 2011.”

But it added that it had restarted operations at the Bakersfield and Paramount refineries, and that it expected to improve profitability on the US West Coast thanks partly to potential increases of shale oil production in the Bakersfield area.

Alon USA owns 1,700 TOTALFINA gas stations, an oil refinery, terminals and a pipeline in the US. Alon Israel is the largest Israel-based fuel company. It has more than 350 gas stations around the country, giving it a 20 percent share of the market.

Occidental Petroleum Corporation reported a first-quarter net profit increase to $1.6 billion ($1.92 per share) from $1.5b.

($1.90 per share) in the same period last year. It reported firstquarter production of 755,000 barrels per day, and predicted steady growth from its US operations in the second quarter, from 6,000 to 8,000 barrels per day.

“In the first half of 2012, we expect our domestic production to grow 3 to 4 mboe/d [thousand barrels of oil equivalent per day] each month from the current quarterly average of 449 mboe/d,” Occidental President and CEO Stephen I. Chazen reported at the Howard Weil 40th Annual Energy Conference on March 27. “If the production growth rate continues at a comparable pace in the second half of 2012, our year-over-year average domestic production growth would be between 8% and 10% in 2012.”

In addition to Occidental’s projected growth in California, Chazen expected drilling activity to speed up in the Permian basin in West Texas, Oil & Gas News reported this week.

“Every forecast I’ve ever made for this business over the Permian over the last five or 10 years has been way too low,” it quoted him as saying in a conference call. “The business is a very large business, larger than a lot of companies. And it will continue to grow at a pretty decent pace.”

Chazen helped his Los Angeles- based company earn a whopping $3.4b. in economic profit last year, an increase of $1.6b. from 2012, according to a Pepperdine University report.

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