Tesoro buys refinery, other SoCal Shell Oil assets
By Muhammed El-Hasan, Staff writer
Independent oil refiner Tesoro Corp. will buy a Wilmington refinery, a products terminal and about 250 Southern California gas stations from Shell Oil Products US for $1.63 billion, the companies said Monday.
The transaction, to include the additional purchase of $180 million to $200 million in petroleum inventory, is expected to close in the second quarter after regulatory approval.
“We pursued Shell in this deal. We went to them and said, `We would like to purchase the assets,”‘ said Bruce Smith, chairman and CEO of San Antonio,
Texas-based Tesoro. “It’s actually an asset that fits very nicely into our system.”
Tesoro operates six refineries in the western U.S., with a combined crude oil capacity of more than 560,000 barrels per day. The company’s largest refinery is the Golden Eagle site in Northern California.
Including the Wilmington refinery would add about 97,500 barrels a day in refining capacity. It would result in “$100 million of immediate value that we can capture in the first 12 months,” Smith said.
“For example, today we bring in crude to the Golden Eagle refinery near San Francisco,” Smith said. “By having this (Wilmington) refinery, we’ll be able to buy even larger quantities of crude and put them into one ship and drop some of it in Los Angeles and drop some of it in San Francisco.”
In addition, Tesoro plans to keep the employees at properties involved in the transaction, Smith said. That includes about 478 full-time employees at the Wilmington refinery.