BP has completed the previously-announced sale of its refinery in Carson, California, and related logistics and marketing assets to Tesoro for approximately $2.4 billion, the companies said on Monday.
"We are pleased to have closed this transformational acquisition," said Greg Goff, CEO of Tesoro. "This transaction is a unique opportunity for Tesoro to combine the best aspects of two West Coast refining, marketing and logistics businesses resulting in a more efficient world-scale integrated refining, marketing and logistics system."
BP said the move was part of a plan to reshape its US fuels business. Cash proceeds from the sale include approximately $1.075 billion for assets and an estimated $1.35 billion primarily for inventory at market value and other working capital.
With the completion of this divestment the strategic refocusing of our U.S. fuels portfolio is essentially complete said Iain Conn, CEO of BPs global refining and marketing business. BPs US fuels business is now anchored around three, highly sophisticated northern refineries, which are crude feedstock-advantaged, and tied to strong marketing businesses.
BP said it will continue to maintain a number of business interests in California, including a large ARCO retail and logistics presence that includes approximately 270 retail sites in the northern part of the state. BP will also continue the distribution and marketing of lubricants through its Castrol brand and remain active in the California natural gas and power sector.
California remains an important state for us and we remain committed to supplying our customers in Northern California and the rest of the Pacific Northwest with the quality fuels they depend on, said Jeff Pitzer, BPs president of the Northwest fuels value chain.
Weve recently upgraded our Cherry Point, Washington, refinery to produce cleaner-burning diesel fuel and are building a new rail terminal at the plant to take advantage of growing supplies of domestically produced crude oil.
In addition to marketing conventional fuels and lubricants in the state, BP said it will continue to support the development of renewable energy sources in California through its Global Biofuels Technology Center in San Diego, and the Energy Biosciences Institute at UC Berkeley.
With the transactions closing on June 1, Tesoro took ownership of the 266,000-bpd Carson 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.
While the sale included BPs ARCO retail brand rights, BP has exclusively licensed those rights from Tesoro for Northern California, Oregon and Washington.
BP retains ownership of the ampm convenience store brand and has franchised it to Tesoro for use in the Southwest.
Cover image courtesy of Thomas Hawk via Flickr