BP’s Carson Refinery Sale will Shake Up the West Coast Market
February 25, 2011
By Leigh Noda
BP is selling its Southern California assets centered on its Carson refinery. Stillwater is uniquely positioned to assist those interested in purchasing the facility.
About the Refinery
The Carson facility is a full conversion refinery that processes 265,000 barrels of crude oil per day. It is one of the largest refineries on the west coast and supplies Southern California, Arizona, and Nevada with gasoline. The refinery fulfills 25% of the Los Angeles gasoline demand and is a major producer of jet fuel and CARB diesel. The refinery employs 1200 staff and 500 contractors. Prior to 2000, the refinery and related assets were operated by ARCO which merged with BP in April 2000.
More than the Refinery
The assets for sale also include BP’s interest in an on-site cogeneration plant, four large crude and product terminals, pipelines, marketing assets and petroleum coke calcinier. The marketing assets are ARCO branded retail stations in southern California that highlight high throughputs and most are combined with the AM/PM mini-market franchise.
Potentially the assets can be split up, with the terminals going into an MLP and the gas stations sold to a local retail operator.
Stillwater’s Personal Knowledge of the Facility
Our associates have a deep understanding of the Southern California refineries. Many have held management positions in facilities including the ExxonMobil refinery in Torrance. Senior Associate, Leigh Noda has 11 years of experience in the Carson refinery, having held positions as ARCO’s manager of technology and business, and manager of Environment, Health and Safety at the Carson refinery. In addition, he played key roles for over two decades in the operating, strategic and investment decisions for the assets. During the $36 billion BP Amoco-ARCO merger, Leigh demonstrated to the FTC the neutral impact of the deal on the cost of West Coast refinery products.
Experts in West Coast Supply and Logistics
The Carson refinery, like all the southern California refineries, faces some unique supply and logistics issues. The gasoline starts with multiple foreign crude oil sources and is refined into many different products. Our associates understand the intricacies of refining many types of gasoline for many different markets. We know how to handle the limited third party infrastructure to get those products to market. And we have detailed understanding of the competitive retail landscape.
California’s Tough Regulatory Environment
Since it’s founding, Stillwater has been working with the State of California and advising clients on the evolving regulatory environment. California refineries are subject to very restrictive stationary source emissions standards. Those standards continue to tighten and new regulations, like the Low Carbon Fuel Standard, are in development. Stillwater works with government agencies and industry to model the impacts of these regulations.
Mergers and Acquisitions Experience
Stillwater Associates supports energy companies in the mergers and acquisition process. We leverage our industry expertise and financial modeling to screen and evaluate potential acquisitions, specializing in refining and distribution assets. In this industry, assets change hands often. We can help find the right buyer for an underused property or a strategic asset for a company looking to expand. We have experience analyzing markets in support of US anti-trust filings that would be required with purchase of the Carson refinery and related assets.
The Carson refinery and related assets are located in a dynamic and unique market. This sale is an exciting opportunity for the right buyer. We are interested in talking to potential buyers and educating them on the unique issues facing the West Coast market.