Tesoro Corp. will pay $1.2 billion to pick up BP’s California oil refinery and 800 gasoline stations in the Southwest.
San Antonio, TX-based Tesoro, the largest independent refiner on the U.S. West Coast, will pay about $1.3 billion more for crude and other inventories at the plant, officials said.
With the deal, Tesoro will control 27 percent of California’s refining capacity, according to data from the U.S. Energy Information Administration.
A fire at Chevron Corp.’s Richmond refinery last week curbed output from Northern California’s largest plant, boosting the region’s fuel prices.
Tesoro understands “the complexities and challenges of operating in California,” said Chief Executive Greg Goff. “We are well positioned to generate significant operational efficiencies, increase our ability to satisfy market demand and reduce stationary source air emissions.”
The purchase will be Tesoro’s third plant in California, a market with emissions regulations that are more complex than those in other states.
The acquisition is the first since Goff joined Tesoro from ConocoPhillips in 2010. The purchase should close by the middle of next year, the company said. Tesoro will sell the storage and pipeline assets to Tesoro Logistics LP after the deal closes. Tesoro is buying Arco-branded gasoline stations in California, Arizona and Nevada from BP.
London-based BP previously said it was going to sell the California refinery as well as a plant in Texas City, TX as part of a plan to shed $38 billion of assets by the end of next year. This latest deal brings the total amount of BP asset sales to $26.5 billion since the start of 2010.
Tesoro owns two California refineries. The Golden Eagle plant in Martinez has a capacity of 170,000 barrels a day and the Wilmington refinery has a capacity of 97,000 barrels a day. The company will have 533,000 barrels a day after buying the Carson refinery.