BP Sells Southwest Assets to Tesoro
CIOMA Merges with CSSARA

BP SELLS SOUTHWEST ASSETS TO TESORO

CARSON, CA. — Making good on their promise to sell their assets and leave the Southwestern United States, BP announced that it will sell its Carson, CA., refinery and "related logistics and marketing assets" to Tesoro Corporation.

The price tag on the deal was $2.5 billion in cash, including the estimated value of inventories when the sale closes.

Included in the "related logistics and marketing assets" is all of the company's Arco-branded retail marketing network in Southern California, Arizona, and Nevada, approximately 800 service stations. The majority of the sites are in Southern California and approximately half of the stations are dealer-owned and operated.

BP will sell the Arco retail brand rights and license those rights from Tesoro for its Northern California, Oregon, and Washington service stations. BP will also continue to produce transportation fuels at its Cherry Point, WA., refinery to supply the Northwest service stations.

BP will retain ownership of the am/pm convenience store brand and franchise it to Tesoro for use in the Southwest.

The Carson Refinery, located in Carson, CA., is located on 650 acres and is one of the largest refineries in California with production of approximately 6.3 million gallons per day of CARB gasoline, 1.7 million gallons per day of jet fuel, and 1.9 million gallons per day of diesel. The refinery supplies approximately 25% of the Los Angeles gasoline demand and 50% of the jet fuel to Los Angeles International Airport.

In addition, the refinery has a 420 MW cogeneration facility located on site, of which BP had 51% ownership, which supplies electricity to the Southern California Edison electrical grid.

The Carson Refinery is also located — literally — next door to Tesoro's Refinery in Wilmington, CA. That facility produces 97,000 bpd of fuel. It is expected that Tesoro will be able to substantially increase their economies of scale by operating the two refineries as one integrated facility in the future.

In addition to the refinery, service stations, and Arco brand, the sale also includes BP's pipelines and storage terminals in the Southwest and its coke calcining operations.

Announcing the deal, Tesoro Corp. President and CEO Greg Goff said, "This transaction is a unique opportunity for Tesoro to combine the best aspects of two West Coast refining and marketing businesses resulting in a more efficient integrated refining, marketing and logistics system."

The sale "is a significant step in the strategic refocusing of our U.S. fuels business," stated Ian Conn, chief executive of BP's global refining and marketing business. "We are pleased to be delivering on the plan we announced last year and when complete we will have a smaller, but well-positioned and very competitive portfolio of refining and marketing businesses in the US."

Conn continued, "BP remains committed to supplying US customers with the fuels, lubricants and petrochemicals they depend on while at the same time delivering long-term growth and profits to our shareholders. We are investing heavily in the capabilities of our businesses in line with that commitment."

Subject to regulatory and other approvals, the deal is expected to close before mid-2013.

CIOMA MERGES WITH CSSARA

SACRAMENTO, CA. — The California Independent Oil Marketers Association announced at the end of July that they are partnering with the California Service Station and Automotive Repair Association (CSSARA).

Going forward, the two petroleum industry associations will operate under the CIOMA brand. CIOMA will manage the overall day-to-day operations of CSSARA including government relations, membership services, events and education.

"In an effort to better serve our members, both boards recognized the importance of coming together to fight for the preservation of small business in California," said 2012 President of CIOMA Reed Rinehart, Rinehart Oil, Ukiah, CA. "There are so many synergies between our organizations — goals, mission statement, and vision — becoming a united front just makes sense."

As part of the merger of the associations, CSSARA 2012 President Dave Sahagun, Pacific Heights Chevron, and CSSARA Immediate Past President Dee Dhaliwal, Dhaliwal & Associates, have been named to the CIOMA Board of Directors.

"We are in the process of reaching out to CSSARA members with a comprehensive member services program," said Rinehart, "and we welcome their involvement with event planning, committees, and educational retail programming, especially in government relations focus and at the Pacific Oil Conference."

"The challenges that small businesses face like out-of-control taxes, mandates and fees, runaway health insurance costs, and the constant needs for capital and other resources are increasing constantly," explained Sahagun. "Having been past President of the San Francisco Small Business Commission I saw these challenges that beset all small business classes. As past President of CSSARA, we considered the best ways to address these same small business challenges, assuring that our membership was provided with quality representation, services and a viable networking structure. We found a relationship with CIOMA as the best possible solution. We look forward to a smooth transition and an exciting future."

Originally published in the September 2012 issue of O&A Marketing News.
Copyright 2012 by KAL Publications Inc.