The well in the middle of Santa Fe Springs sat idle for more than 30 years. But 18 months ago, as oil prices were spiraling upward, the well’s operator decided to bring it back to life.

Breitburn Energy Partners LP spent $300,000 to reactivate the well, which came on line about a year ago.

It’s turned out to be a worthy investment. If oil prices stayed at the current $100 a barrel level, and if the well pumped its current 15 barrels a day, the well would produce nearly $550,000 worth of oil in a year.

“The cost of restarting this well has been more than offset by the increasing price of oil,” said Greg Brown, executive vice president and general counsel of the Los Angeles-based Breitburn.

Los Angeles may be no Saudi Arabia or even west Texas but such scenes are being repeated across active oil fields in L.A. County, which in the beginning of the 1900s was one of the biggest oil producers in the country.

Fields from the Baldwin Hills to Santa Fe Springs to Signal Hill and Wilmington that have sat idle for decades are being reactivated. The high prices help, and so do new high-tech methods that enable oil companies to squeeze more oil out of old wells.

The state’s Division of Oil, Gas and Geothermal Resources has recorded 51 applications for significant well upgrades in the first two months of this year for the district covering Los Angeles and Orange County, up from 29 for the same period last year. The district has about 4,000 wells, with the majority in L.A. County.

And while the 27 million barrels of oil that were extracted last year in the county amounted to only a fraction of the 2.9 billion barrels produced in the United States, at $100 a barrel, oil remains a multi-billion dollar local industry.

“We’re definitely seeing a spike in wells being reworked,” said Hal Bopp, the state’s oil and gas supervisor.

Diagonal drilling

Consider one 12-acre parcel in L.A. County’s largest oil field in Wilmington. The parcel near the corner of Anaheim Street and Banning Boulevard, which New York-based Warren Resources Inc. bought from Exxon-Mobil Corp. in 1999, was for decades home to a series of wells that were essentially vertical holes in the ground.

Now, Warren Resources is busy drilling diagonally and horizontally from the existing surface well-heads, reaching out to previously untapped oil pockets.

“Instead of drilling from people’s yards straight down, we drill diagonally or horizontally from one central location,” said David Fleming, senior vice president and general counsel at Warren. “It allows us to get to more oil in a more environmentally sensitive manner.”

Steadily rising oil prices over the last eight years have made it increasingly economical for Warren to pursue this more expensive diagonal and horizontal drilling. “We’ve definitely picked up the pace of the drilling as the price has risen,” Fleming said.

Of course, this is far from the first oil drilling boom in L.A. Oil has been an integral part of the L.A. economy ever since Edward Doheny struck oil in the mid-1890s just outside downtown L.A. By 1900, the Los Angeles City Oil Field was the largest oil-producing parcel on the West Coast.

And in the 1920s several new spectacular finds in what are now Signal Hill, Wilmington and Huntington Beach set off a wildcatter rush with drilling rigs popping up everywhere. By 1923, California was the top oil producing state and accounted for nearly one-fourth of global oil production.

But a decade later, larger finds in East Texas and Oklahoma led to an oversupply of oil and much of L.A. industry collapsed. And after World War II, cheap oil from the Middle East and Latin America flooded in. Housing developments sprung up on abandoned oil fields.

Despite all that, the local oil industry never went away. There was a boom during World War II to supply the tremendous need for oil to drive America’s military machine. And after the Arab oil embargo of 1973, dramatically higher oil prices caused new wells to be drilled in Santa Fe Springs, Brea and other communities.

Most activity has been on land. The huge 1969 oil spill off the coast of Santa Barbara has effectively halted any attempts to drill offshore wells.

New technologies

But drilling in Los Angeles though it may not be in the middle of the Arabian desert with its 115 degree heat involves obstacles that Bopp labels “very challenging.”

“First, the oil fields here are very mature, with some in operation for nearly 90 years. It’s hard to get more oil out of them. Second, you’re dealing with a very unique environment: probably the most highly urbanized oil fields in the world and a whole raft of permitting issues,” he said.

As a result, there wasn’t much new drilling throughout most of the 1990s when oil prices were at historical lows. But that changed in the early 2000s as oil prices marched up and new technologies came to the fore.

Not only was the horizontal and “slant” drilling perfected, but with the application of computer technology and, most recently, cameras on drill bits, the drilling was also much more precise.

“The cameras allow us to see when we hit a specific (underground) formation instead of extrapolating from sound waves,” Fleming said.

What’s more, there are new methods for getting oil out of existing well areas, including methods to increase perforations to allow more oil in surrounding rock to flow into wells and methods to inject carbon dioxide and other gases to flush out the oil. Previously, water injections had been the primary method of flushing out oil, but it created dangers of flooding.

Still, even with this new technology, getting permission to drill new diagonal or horizontal wells isn’t easy. Breitburn has been waiting two years for permission from Beverly Hills to extend wells from its facility at the corner of Pico Boulevard and Doheny Drive into potentially oil rich ground beneath Beverly Hills.

And Plains Exploration and Production Co., which operates much of the Inglewood oil field in Baldwin Hills, is awaiting the completion of an environmental impact report before it can expand its operations there.

“Expanding oil production is more like steering a huge ship than turning on a dime. You need plenty of lead time,” said Breitburn’s Brown.

Adding to the difficulties are chronic labor and equipment shortages. As oil prices have skyrocketed, new drilling is occurring at oil fields throughout the country, outstripping the supply of oil drilling rigs and highly trained rig-workers. Bopp said these shortages are more acute in the larger oil fields of Kern County but they have impacted some of the expansion projects in L.A. County.

As a result, the activity today doesn’t resemble the stampedes of past booms. “It’s much more incremental,” Bopp said.