BP sells US refinery and fuel retail network in latest asset divestment
14 August 2012
On August 13, BP said it had 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, as part of a previously announced plan to reshape BP’s US fuels business. This announcement brings the total value of the divestments that BP has agreed since the beginning of 2010 to $26.5 billion.
The Carson refinery sale is part of BP's plan to raise $38bn by the end of 2013 to repay the costs of the Macondo oil spill
BP plans to sell a total of $38bn worth of assets by the end of 2013 to repay bills relating to the clean-up, fines and compensation that have arisen from the Macondo spill in the Gulf of Mexico, which resulted in 11 deaths and widespread damage to the environment.
"Today's 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.
"As an established refiner and marketer, Tesoro provides a strong future for the business and for its employees," said Conn.
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.
BP is nearing completion of a multi-billion dollar upgrade at its Whiting Refinery in Northwest Indiana. The largest private sector investment in Indiana history, the project will transform Whiting's crude processing capabilities and is expected to be completed in the second half of 2013. The company is also upgrading the Cherry Point Refinery to produce cleaner burning diesel fuel and investing in a cleaner gasoline project at its joint-venture refinery near Toledo, Ohio.
BP says it has invested more in the United States over the last five years than any other oil and gas company. With more than $52 billion in capital spending between 2007 and 2011, BP invests more in the US than in any other country. The company is the second largest producer of oil and gas in the US, a major oil refiner and a leader in alternative energy sources including wind power and biofuels. BP provides enough energy each year to light the entire country. With 23,000 US employees, BP supports nearly a quarter of a million domestic jobs through its business activities. For more information, view our BP in America animation video at http://www.youtube.com/watch?v=I6n9cZ1xxQw or visit www.bp.com.
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