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Shell Delays Closure of Calif. Refinery

The New York Times: Shell Delays Closure of Calif. Refinery

“an antitrust investigation into Shell’s decision to close the refinery will continue.”

By THE ASSOCIATED PRESS
Published: August 13, 2004
Posted 14 August 04

LOS ANGELES (AP) — Shell Oil Co. has agreed to delay the planned closure of a Southern California oil refinery that produces 2 percent of the state’s gasoline to allow more time to find a buyer and negotiate a sale, state officials said Friday.

The decision is “a welcome show of cooperation with our effort to keep open this refinery, which is crucial to helping protect California drivers from even higher gas prices than they already pay,” state Attorney General Bill Lockyer said in a statement.

A report prepared for the attorney general’s office by a Dallas-based consulting firm had concluded the Bakersfield facility can be run profitably, and that a sale can be structured that is economically viable for both seller and buyer.

Shell President Lynn Laverty Elsenhans agreed to keep the refinery running through March 31 — six months later than the Oct. 1 planned shutdown date. Elsenhans said the company would continue making a good-faith attempt to sell the facility, Lockyer’s statement said.

Shell officials last November announced their decision to shutter the 72-year-old refinery, citing a decline in oil production in the region and the inefficiency of the aging inland operation.

The proposed closure generated outrage among politicians and consumers who argued the dismantling would further squeeze supplies and inflate pump prices for California motorists, who have long paid the highest gasoline prices in the nation.

Shell’s ability to keep the refinery operating through March 31 may depend on whether it can obtain a modification of a consent decree over air pollution emissions at the facility.

The attorney general said an antitrust investigation into Shell’s decision to close the refinery will continue. The Federal Trade Commission also has been investigating the proposed shutdown.

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