British energy group BP said Monday that it selling its refinery in Carson, Calif., and other West Coast assets, to Tesoro for $2.5 billion in cash.
The sale is part of BPs 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 US Gulf of Mexico oil spill. Other assets include pipelines, storage terminals, marine terminals and about 800 Arco-branded retail outlets in southern California, Arizona and Nevada. The troubled energy major has agreed to sell $26.5 billion of assets since the start of 2010, including the latest deal.
BP said that the Carson sale would allow it to focus its investment and operations on the British groups three refineries in the northern United States.
he Carson refinery, with a capacity of 266 million barrels per day, is adjacent to Tesoro’s Wilmington refinery. Combining the two is expected to cost $225 million but yield annual savings of about $250 million, Tesoro said. Tesoro also will acquire BP’s 51 percent stake in a 400-megawatt gas cogeneration facility which supplies electricity to the Carson refinery and the local area.
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.
Todays announcement is a significant step in the strategic refocusing of our US fuels business, chief executive of BPs global refining and marketing business, Iain Conn, said in Mondays statement.
Together with the intended sale of Texas City, this will allow us to focus BPs operations and investments exclusively on our three northern US refineries, which are crude feedstock advantaged, and their large and important marketing businesses.
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 BPs 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.
The deal remains subject to regulatory approvals and is expected to complete before mid-2013.
In late afternoon trade on Monday, BPs share price fell 0.27 percent to 447.35 pence on Londons FTSE 100 index of leading companies, which was 0.41 percent lower at 5,823.25 points.
The oil giant had 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.
BPs fortunes were ravaged two years ago by an explosion on the BP-leased Deepwater Horizon rig that killed 11 workers, sent millions of barrels of oil spewing into the sea and left it with huge compensation costs.
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