Royal Dutch Shell Plc  .com Rotating Header Image

Bloomberg: Tesoro to Buy Shell Plant, Stations for $1.63 Billion (Update1)

By Victor Epstein

Jan. 29 (Bloomberg) — Tesoro Corp., a Texas refiner, agreed to buy Royal Dutch Shell Plc’s refinery near Los Angeles and 140 filling stations for $1.63 billion, to lift its capacity to process low-cost crude and tap the largest U.S. fuel market.

The filling stations, located in Southern California, will continue to operate under the Shell brand, San Antonio-based Tesoro said today in a statement. Tesoro said it also agreed to buy 140 USA Petroleum filling stations, located mostly in California, and a fuel terminal in New Mexico for $277 million.

U.S. refiners are expanding capacity to process high-sulfur oils that are cheaper than lighter varieties and yield higher profit margins. Tesoro Chief Executive Officer Bruce Smith said the plant he’s buying from Shell, Europe’s largest oil company, will pay for itself in four years.

“It’s a terrific refinery that compliments the light, sweet refineries we already have,” Smith said.

“It gives us more balance.”

The acquisitions also mark Tesoro’s entry into the California retail gasoline market, biggest in the U.S.

Shares of Tesoro rose 58 cents to $74.40 at 10:03 a.m. in New York Stock Exchange composite trading. Shell rose 6 pence to 1,728 British pence ($33.85) in London.

To contact the reporter on this story: Victor Epstein in Houston at [email protected] .

Last Updated: January 29, 2007 10:07 EST

royaldutchshellplc.com and its sister websites royaldutchshellgroup.com, shellenergy.website, shellnazihistory.com, royaldutchshell.website, johndonovan.website, shellnews.net and shell2004.com are all owned by John Donovan. There is also a Wikipedia article.

0 Comments on “Bloomberg: Tesoro to Buy Shell Plant, Stations for $1.63 Billion (Update1)”

Leave a Comment

%d bloggers like this: