Tesoro wins antitrust OK to buy California BP refinery

Fri May 17, 2013 4:32pm EDT
 
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By Diane Bartz and Erwin Seba

WASHINGTON/HOUSTON (Reuters) - Refiner Tesoro Corp. (TSO.N: Quote) has received formal approval from antitrust regulators in Washington and Sacramento on Friday to buy BP Plc's (BP.L: Quote) refinery and other assets in southern California for more than $2 billion.

Tesoro will not have to sell any of the assets anti-trust regulators said, but California officials demanded the company upgrade the refinery it was buying.

Californians regularly pay some of the highest gasoline prices in the nation. The state's average price for a gallon of regular unleaded gas is around $4.05, according to the AAA, formerly known as the American Automobile Association.

The Federal Trade Commission, which assessed the deal to ensure it complied with federal antitrust law, said there was evidence that combining the BP refinery and a Tesoro refinery, which nearly abut each other, could reduce the cost of producing the special, low-carbon gasoline that state law requires be sold in California.

"Demand for California-grade gasoline has declined over the last decade and is projected to continue to do so. Additionally, seven major refiners supply the West Coast, and that number will not change as a result of the deal," said the FTC said in a statement.

California Attorney General Kamala Harris also approved the transaction, saying 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 by maintaining capacity.

The state also received a commitment that Arco gasoline, which sells less expensive gasoline, would continue to do so. BP had supplied the chain from the Carson refinery that Tesoro is acquiring. It will be the fourth retail chain Tesoro supplies on the West Coast.

Tesoro also agreed to upgrade both its older Wilmington refinery and the Carson refinery that it is purchasing from BP to reduce greenhouse gasses.   Continued...

 
BP logo is seen at a fuel station of British oil company BP in St. Petersburg, October 18, 2012. REUTERS/Alexander Demianchuk