BP announced today it has reached agreement to sell its Carson, California refinery and related logistics and marketing assets in the region to Tesoro Corporation for $2.5 billion in cash (including the estimated value of hydrocarbon inventories and subject to post-closing adjustments) as part of a previously announced plan to reshape BP’s US fuels business.
"The announcement is a significant step in the strategic refocusing of our US fuels business," said Iain Conn, chief executive of BP's global refining and marketing business. "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."
Subject to regulatory and other approvals, Tesoro will acquire the 266,000 barrel per day refinery near Los Angeles as well as the associated logistics network of pipelines and storage terminals and the ARCO-branded retail marketing network in Southern California, Arizona and Nevada. The sale also includes BP's interests in associated cogeneration and coke calcining operations. The closing is expected to happen before mid-2013.
BP will sell the ARCO retail brand rights and exclusively license those rights from Tesoro for Northern California, Oregon and Washington and continue to produce transportation fuels at its Cherry Point, Washington refinery. BP will also retain ownership of the ampm convenience store brand and franchise it to Tesoro for use in the Southwest.
In February 2011 BP announced plans to refocus its refining and marketing business on its northern US refineries and find buyers for Carson and the Texas City Refinery in Texas.
"We are pleased to be delivering on the plan we announced last year and when complete we will have a smaller, but well-positioned and very competitive portfolio of refining and marketing businesses in the US," Conn added. "BP remains committed to supplying US customers with the fuels, lubricants and petrochemicals they depend on while at the same time delivering long-term growth and profits to our shareholders. We are investing heavily in the capabilities of our businesses in line with that commitment."
The announcement brings the total value of the divestments that BP has agreed since the beginning of 2010 to $26.5 billion. This is part of the previously announced programme to divest $38 billion of assets by the end of 2013.