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HOUSTON -- Shell Oil Products US will continue looking for a buyer for its Bakersfield petroleum refinery after negotiations broke down with its leading bidder, according to the Sacramento Bee. Shell plans to close the plant in March.
Facing pressure from state officials, consumer advocates and others, the company has agreed to seek a purchaser.
Shell argues that closing the aging, relatively small plant makes good business sense, but critics say a shutdown would lead to higher fuel prices in a state where prices exceed the U.S. average by 30 cents per gallon.
The Bakersfield plant supplies 2 percent of California's gasoline and 6 percent of its diesel fuel.
Tom Dresslar, spokesman for California attorney general Bill Lockyer, called the collapse of talks disappointing and said his office is looking into the issue. He identified the potential buyer as Kelso & Co., a private investment firm in New York. "We're trying to get a firm handle on the circumstances," Dresslar said.
Although some critics have accused Shell of making a halfhearted attempt to sell the refinery, the company said it is trying vigorously to make a deal.
"Negotiations with the leading bidder resulted in no deal," said Shell spokesman Stan Mays. "We're doubling back with other final bidders to gauge interest."