BP sells California refinery, regional retail assets to Tesoro Corp. for $2.5 billion

LONDON – Oil company BP said Monday that it has agreed to sell its refinery in Carson, California and other West Coast assets to Tesoro Corp.

Tesoro is paying $2.5 billion cash for the refinery, pipelines, storage terminals, marine terminals and about 800 Arco-branded retail outlets in southern California, Arizona and Nevada, the British company said. BP is also selling the Arco brand rights for northern California, Oregon and Washington and will lease them back from Tesoro.

“This transaction is a unique opportunity for Tesoro to combine the best aspects of two West Coast refining and marketing businesses resulting in a more efficient integrated refining, marketing and logistics system,” said Greg Goff, Tesoro’s president and CEO.

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Earlier Monday, BP announced it was selling two gas processing plants in Texas to Eagle Rock Energy Partners for $227.5 million in cash for the Sunray and Hemphill gas processing plants in Texas.

BP says it has now sold or agreed to sell assets worth $26.5 billion since 2010. The company has a target of $38 billion in disposals by the end of next year to help pay the costs of the Macondo well blowout in the Gulf of Mexico.

Tesoro, based in San Antonio, Texas, said the $2.5 billion purchase price includes about $1.3 billion for the oil and refined products on the site at the time of closing.

The 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 per cent stake in a 400-megawatt gas cogeneration facility which supplies electricity to the Carson refinery and the local area.

BP shares were down 0.2 per cent at 447.85 pence in early afternoon trading in London.