Energy Department Sells Historic Teapot Dome Oilfield
Sale Ends Department Ownership of Naval Petroleum Reserves
WASHINGTON – Today, the Energy Department finalized the sale of the historic Teapot Dome Oilfield located 35 miles north of Casper, Wyoming to Stranded Oil Resources Corporation, a subsidiary of Alleghany Capital Corporation. More than $45 million in proceeds from the sale of the oilfield – known officially as the Naval Petroleum Reserve Number 3 (NPR-3) – will be deposited into the U.S. Treasury.
Teapot Dome, consisting of 9,481 acres, was set aside as a naval oil reserve in 1915, and is best known for its connection to a scandal that rocked the Harding Administration approximately 90 years ago. At the time, the Teapot Dome Scandal captured headlines and received nationwide attention because of a secret deal in which Secretary of the Interior Albert Fall leased the reserve to a private company in return for "gifts" amounting to $400,000. Fall was subsequently convicted of bribery. The Supreme Court invalidated the leases in 1927 and the Teapot Dome reserve was immediately shut down.
Apart from some exploratory and offset wells drilled in the 1950s and 1960s, the oilfield was essentially closed until full development resumed in 1976. In 1977, jurisdiction for the Teapot Dome reserve was transferred from the Navy to the Energy Department. Now referred to as NPR-3, in 1993 it became the home of the Department’s Rocky Mountain Oilfield Testing Center (RMOTC). For nearly two decades, RMOTC used the reserve as a commercial testing ground primarily for new technologies and processes designed to improve drilling, oil production, and enhanced oil recovery. In nearly 40 years of operation under the Department’s management, this stripper oilfield produced over 22 million barrels of oil resulting in over $569 million deposited into the U.S. Treasury.
In 2013, the Energy Department recommended to Congress that NPR-3 be sold to the private sector for continued use as an oilfield.
Today’s sale is the culmination of a competitive bidding process that closed on October 16, 2014. Under the terms of the sale, operation and ownership of all NPR-3’s mineral rights and approximately 9,000 acres of land is immediately transferred to Stranded Oil Resources Corporation. The remaining surface acreage is scheduled to be transferred in May.