SAN ANTONIO -- The oil refiner Tesoro Corp. will buy a Los Angeles-area refinery and 250 Southern California retail sites from a division of Royal Dutch Shell PLC, for $1.63 billion.
Yesterday, the company said its board has approved the deal, with Shell Oil Products US. The price does not include the value of petroleum inventory that will also be acquired. That is expected to be as much as $200 million.
Besides the refinery, in Wilmington, the deal includes Shell's Wilmington products terminal.
San Antonio-based Tesoro said it signed a long-term agreement that will keep the retail sites, each of which averages sales of 225,000 gallons per month, under Shell's brand name.
"It really just completes the Pacific Rim strategy that we have had," said Bruce Smith, Tesoro's chairman and chief executive.
The refinery processes heavy, sour crude.
"We don't have a refinery that has this type of complexity and processing capability," Smith said. Tesoro currently operates six refineries, with total capacity of 560,000 barrels per day. Tesoro's retail system includes 450 branded retail stations, with 200 of those operating under the Tesoro and Mirastar brands.
Shell's Wilmington refinery has a capacity of about 100,000 barrels per day.
Smith said few, if any jobs will be lost in the transaction.
Tesoro also said its board has approved an agreement to purchase 140 USA Petroleum Corp. retail sites, most of which are in California, a New Mexico terminal, and the USA brand, for $277 million. That does not include the value of inventory when the deal closes, which could be as much as $15 million.