Royal Dutch Shell plc today welcomed the below announcement by Shell Oil Products US that it has signed an agreement to sells its Los Angeles Refinery and related assets to Tesoro:
Houston – Jan. 29, 2007 – Shell Oil Products US announced today that it has signed agreements to sell its Los Angeles Refinery, Wilmington Products Terminal and approximately 250 retail sites and supply agreements in and around Los Angeles and San Diego to Tesoro Corporation.
The proposed sale is part of Shell’s previously announced ongoing strategy to streamline and concentrate its Downstream portfolio. The transaction is expected to close in mid-year 2007, assuming all regulatory approvals are obtained and other conditions to closing are satisfied.
The Los Angeles Refinery, which began operations in 1923 as California Petroleum Corp, has a crude throughput capacity of approximately 97,500 barrels per day. Shell acquired an ownership interest through a joint venture in 1998 and became sole owner in 2002.
Commenting on the proposed sale of the assets, Rob Routs, Royal Dutch Shell Executive Director Downstream, said: “This sale represents good value for our shareholders and because Tesoro are acquiring all assets as a going concern, it also secures jobs and energy supplies for people in Southern California. The deal we have negotiated comes as a result of a proactive approach from Tesoro to which we have reacted positively as it aligns with our ongoing strategy of managing our Downstream portfolio.”
The divestment is consistent with Shell’s strategy of managing its portfolio to deliver maximum value to customers and shareholders. The retail sites to be sold to Tesoro will remain Shell-branded, and Shell’s commitment to further build on its strong branded presence in California and elsewhere will continue.
Tesoro has advised Shell that it intends to offer employment to most, if not all, of about 500 affected Shell employees at the refinery, terminal, and certain employees within Shell’s retail organization. Tesoro has also expressed that it will abide by the collective bargaining agreement covering the Los Angeles Refinery employees.
Shell Oil Products US will honor dealers’ agreements and rights under the Petroleum Marketing Practices Act and any other applicable state or federal laws. Per the terms of agreements with multi-site operators (MSO), the company plans to assign some MSO contracts to Tesoro. Some supply contracts that Shell has with its wholesalers and open dealers in the area will be assigned to Tesoro.
Shell will continue to serve California’s diverse energy needs with significant investments in refining, terminal and pipeline operations, retail, exploration and production, lubricants, hydrogen and wind. Shell companies are committed to growing and enhancing the Shell brand in California while continuing to provide local motorists with high-quality fuels and services.
Shell is committed to maintaining all assets in its portfolio so that they run safely and reliably. The company will continue to make necessary investments in compliance, health, safety, environmental and other projects for these assets until the transaction with Tesoro is complete.
About Shell Oil Products US
Shell Oil Products US, a subsidiary of Shell Oil Company, is a leader in the refining, transportation and marketing of fuels in the United States. Shell quality fuels and services are available through more than 13,500 Shell stations nationwide. Shell Oil Products US is a dba for Equilon Enterprises LLC. Shell Oil Company is an affiliate of the Shell Group (NYSE:RDS.A) and (NYSE:RDS.B). For more information, please visit www.shell.com
About Tesoro Corporation
Tesoro Corporation, a Fortune 150 and a Global Fortune 500 company headquartered in San Antonio, Texas, is an independent refiner and marketer of petroleum products. Tesoro operates six refineries in the western United States with a combined crude oil capacity of more than 560,000 barrels per day. Tesoro’s retail marketing system includes over 450 branded retail stations, of which approximately 200 are company operated under the Tesoro® and Mirastar® brands. Tesoro’s commercial marketing system includes sales of jet fuel and marine fuels.
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