BP Sells U.S. Refinery for $2.5 Billion Tesoro Corp.

Aug. 13, 2012
BP said that the Carson sale would allow it to focus its investment and operations on the group's three refineries in the northern U.S.

BP's (IW 1000/3) sales of its Carson refinery in California to U.S. peer Tesoro Corp. is part of its previously-announced plans to sell $38 billion of assets by the end of 2013 to help pay the clean-up bill and compensation costs from the devastating 2010 U.S. Gulf of Mexico oil spill.

The sale price was $2.5 billion, the company announced on Monday.

Tesoro will acquire the Carson refinery near Los Angeles -- which produces 266,000 barrels of oil a day -- as well as the associated logistics network of pipelines and storage terminals. It will also take ownership of BP's ARCO-branded retail marketing network in Southern California, Arizona and Nevada. BP added that it would also sell the ARCO retail brand rights and exclusively license those rights from Tesoro for Northern California, Oregon and Washington

BP said that the Carson sale would allow it to focus its investment and operations on the British group's three refineries in the northern United States.

The troubled energy major has agreed to sell $26.5 billion of assets since the start of 2010, including the latest deal. BP had announced in February 2011 that it would sell off two major U.S. refineries -- including Carson -- as part of a restructuring to shift its focus away from the United States and to meet its compensation costs.

It also intends to offload the Texas City facility which suffered a deadly 2005 explosion that killed 15 workers and sparked safety concerns across its US operations.

"Today's announcement is a significant step in the strategic refocusing of our U.S. fuels business," chief executive of BP's global refining and marketing business, Iain Conn, said in Monday's statement.

"Together with the intended sale of Texas City, this will allow us to focus BP's operations and investments exclusively on our three northern US refineries, which are crude feedstock advantaged, and their large and important marketing businesses."

BP meanwhile last week announced the sale of its Sunray and Hemphill gas processing plants in Texas, together with their associated gas gathering system, to Eagle Rock Energy Partners for $227.5 million.

BP last month said it plunged into a second-quarter net loss, hit by lower output, falling oil prices and a near $5.0-billion writedown on the value of assets. It made a loss after tax of $1.39 billion in the three months to June, compared with net profit of $5.72 billion in the year-earlier period.

BP is also facing major headaches in Russia after a Siberian court in July ordered the British group to pay $3.1 billion in damages for its attempted Arctic oil exploration tie-up with the state giant Rosneft. The ruling meanwhile came after BP entered direct talks with Rosneft over a buy-out by Russia's largest oil company of the British firm's stake in the troubled TNK-BP joint venture worth billions of dollars.

Copyright Agence France-Presse, 2012   

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