Tesoro Topping Off Salt Lake City Retail Network
Refiner-marketer expects to acquire 15 stations in Utah in May
Published in CSP Daily News
SAN ANTONIO, Texas -- As part of its "initiatives to enhance gross margin," Tesoro Corp. expects "to close on the acquisition of 15 retail stations in the Salt Lake City area," this month, president and CEO Greg Goff said during the company's first-quarter 2014 earnings call.
Goff did not name the current owner of the stations. The refiner-marketer's retail segment sells gasoline, diesel fuel and convenience store items through company-operated gas stations and branded jobber/dealers at 2,227 locations in Alaska, Arizona, California, Colorado, Idaho, Iowa, Minnesota, Nebraska, Nevada, New Mexico, North Dakota, Oregon, South Dakota, Utah, Washington, Wisconsin and Wyoming under the ARCO, Exxon, Mobil, Shell, Tesoro and USA fuel brands.
"We have also recently extended our right to use the Exxon and Mobil brands to include the states of Utah, Arizona and Nevada and plan on rebranding these stations under this new agreement," he said.
The 15 stations will carry the Exxon fuel brand, according to Tesoro's quarterly earnings filing with the U.S. Securities & Exchange Commission (SEC).
Tesoro supplies its retail outlets through its six refineries in the western United States. Its Salt Lake City refinery, with a total crude-oil capacity of 58,000 barrels per day (bpd), supplies Tesoro's network of Shell, Tesoro and USA Gasoline stations mostly in Utah, Idaho and Nevada.
In its retail business, the focus continues to be to strengthen the integration between refining and marketing, said Goff. The company will "continue to build out our brand presence in the markets where we are."
In response to a question regarding master limited partnerships, he added that MLPs are "something that we continue to look at, but have not arrived at any decisions on how we would do that at this point in time."
For first-quarter 2014, Tesoro reported net income of $78 million, compared to net income of $93 million for first-quarter 2013. Operating income for the company's retail segment was $19 million for the three months ending March 31, 2014, compared to $15 million for the same period in 2013.
Same-store fuel sales during the quarter were higher by almost 0.5% versus the same period last year; however, retail fuel margins were down relative to the first quarter of last year. Total retail fuel sales volumes were up more than 128% year-over-year driven by the addition of approximately 835 dealer-operated ARCO retail stations on June 1, 2013.
Tesoro acquired the integrated Southern California refining, marketing and logistics business from BP West Coast Products LLC, providing it with an opportunity to combine two West Coast refining, marketing and logistics businesses resulting in a more efficient integrated refining, marketing and logistics system. The acquired assets included the
Carson refinery located adjacent to Tesoro's Wilmington refinery, related marine terminals, land terminals and pipelines. The assets also included the ARCO brand, as well as a master franchisee license for the ampm c-store brand and the supply rights to approximately 835 branded dealer-operated and branded wholesale stations in central and southern California, Nevada and Arizona.
Also, on September 25, 2013, Tesoro completed the sale of all of its interest in Tesoro Hawaii LLC, which operated a Hawaii refinery, retail stations and associated logistics assets.
"The company is on track to deliver our strategic objectives for 2014," said Goff. "We're focused on continuing to deliver the synergies associated with creating a world-scale refining and marketing business in Southern California; enhancing gross margins by supplying additional advantaged crude oil to our refining system and growing the logistics business while maintaining strong financial discipline."