POSTED: 11:37 a.m. HST, Jun 17, 2013
LAST UPDATED: 12:57 p.m. HST, Jun 17, 2013
Tesoro Corp. said today it has signed an agreement with Houston-based Par Petroleum Corp. to sell all of its interest in Tesoro Hawaii, LLC, which operates the 94,000 barrel per day Kapolei refinery, retail stations and associated logistical assets.
As part of the agreement, Par Petroleum intends to operate the assets as an integrated refining, logistics and retail system, Tesoro said in a news release.
Par Petroleum will pay $75 million for the operations, plus the market value of net working capital valued at about $225 million to $275 million, according to the release. Also included is an “earn out” arrangement payable over three years based on the performance of the refinery.
Tesoro said it hopes to close the deal by the third quarter of this year, subject to regulatory approval.
Par Petroleum was formed in August last year when the company, formerly known as Delta Petroleum Corp., emerged from Chapter 11 bankruptcy with the new name. Par is primarily focused on finding and developing natural gas reserves from unconventional gas reservoirs within the Rocky Mountain Region, according to its website.
Gov. Neil Abercrombie told reporters today, “I talked to Mr. Goff (Tesoro CEO Greg Goff) earlier today and we’ve been in contact all along, hoping to have a positive outcome. Obviously I don’t have the working details of the sale of Tesoro, but we are in touch with the new folks and every indication I have is that there will be a smooth transition and we’re going to be able to keep the refinery going.
“That means not just that jobs are (still) going but we’ll have some continuity at least in the production and distribution right now for energy purposes and it gives us some breathing room in terms of trying to determine the energy future both for importation – manufacturing of energy, if you will – and it’s distribution here in Hawaii.”