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HOUSTON -- Less than a year after BP reached an agreement to sell its Southwest U.S. retail assets and its Carson, Calif., refinery to Tesoro Corp., the two companies have completed the $2.4-billion deal.
The transaction, which closed June 1, was part of BP's strategic refocusing efforts. According to the terms of the pact, BP's ARCO brand and associated registered trademarks, as well as its master franchisee license for the ampm convenience store brand, now transition to Tesoro.
BP will exclusively license the ARCO retail brand rights from Tesoro for northern California, Oregon and Washington and continue to produce transportation fuels at its Cherry Point, Wash., refinery. The company will also retain ownership of the ampm brand, as CSNews Online previously reported.
Cash proceeds from the sale include approximately $1.075 billion for assets and an estimated $1.35 billion primarily for inventory at market value and other working capital, according to BP.
"With the completion of this divestment, the strategic refocusing of our U.S. fuels portfolio is essentially complete," said Iain Conn, chief executive of BP's global refining and marketing business. "BP's U.S. fuels business is now anchored around three, highly sophisticated northern refineries, which are crude feedstock-advantaged and tied to strong marketing businesses."
BP will continue to maintain a number of business interests in California, including a large ARCO retail and logistics presence that includes approximately 270 retail sites in the northern part of the state. BP will also continue the distribution and marketing of lubricants through its Castrol brand and remain active in the California natural gas and power sector.
"California remains an important state for us, and we remain committed to supplying our customers in northern California and the rest of the Pacific Northwest with the quality fuels they depend on," said Jeff Pitzer, BP's Northwest Fuels Value Chain president. "We've recently upgraded our Cherry Point, Wash., refinery to produce cleaner-burning diesel fuel and are building a new rail terminal at the plant to take advantage of growing supplies of domestically produced crude oil."
In addition to marketing conventional fuels and lubricants in the state, BP will continue to support the development of renewable energy sources in California through its Global Biofuels Technology Center in San Diego, and the Energy Biosciences Institute at the University of California, Berkeley, according to the company.
Last month, Tesoro received formal approval from the California Attorney General and the U.S. Federal Trade Commission to purchase the Carson City, Calif., refinery. Attorney General Kamala Harris said her office and the California Energy Commission would monitor gas prices, volume and refinery capacity. A deal with the company also provides for safeguards against price spikes, as CSNews Online previously reported.