06 February 2002
Tesoro buys California refinery
Tesoro Petroleum Corp. will spend $1.08 billion to purchase San Francisco-based Valero Energy Corp. The deal for the refinery will boost Tesoro's output and give the San Antonio-based company a presence in the California market.
The deal also includes 70 retail service stations in Northern California, the companies said in separate statements. The purchase price includes estimated amounts for inventories.
Regulators forced Valero to divest the refinery and stations to win approval for its acquisition of rival Ultramar Diamond Shamrock Corp.
Tesoro's combined throughput capacity will increase by more than 40% to nearly 560,000 barrels per day. In addition, Tesoro's branded retail network will expand to approximately 750 locations, including nearly 100 stations in California.
The highly sophisticated Golden Eagle refinery currently produces approximately 105,000 barrels per day of gasoline, about 70% of which is California Air Resources Board (CARB) Phase II; it is the largest producer of CARB diesel. The company will continue the safety and reliability investment program initiated by Valero. Included in this capital program is a project currently under way that will increase CARB production.
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