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Tesoro buys S.L. refinery

Ownership change not expected to result in layoffs

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San Antonio-based Tesoro Petroleum Corp. announced Tuesday that it will purchase British Petroleum's Salt Lake and Mandan, N.D., oil refineries.

The deal, valued at $777 million in total enterprise value, will be financed with debt.

Approximately $175 million of the transaction includes storage, pipeline, distribution and gasoline marketing operations. The two refineries are valued at $602 million.

BP's Salt Lake refinery, with a crude oil capacity of 55,000 barrels a day, is the largest of four refineries in Utah and employs 190 people.

The North Dakota refinery employs 210 people.

Utah's other three refineries are owned by Chevron, Phillips and Flying J.

The company intends to keep all of the current employees at both refineries, according to Susan Pirotina, a spokeswoman for Tesoro.

As part of the transaction, BP will transfer ownership of 45 retail gasoline stations to Tesoro, 33 of which are located in the Salt Lake area operating under the Amoco brand name.

The 33 Utah stations will undergo a name change later this year, a first for Tesoro brand gasoline stations in Utah.

"We do not have any (Tesoro stations) in Utah yet," Pirotina said.

However, Tesoro does own and operate Mirastar gasoline stations at five Utah Wal-Mart stores.

The acquisition also assigns to Tesoro contracts for supplying fuel to approximately 300 Amoco-branded stations.

Bruce Smith, Tesoro's chairman, president and chief executive officer, said in a news release that the transaction would increase the company's 2001 fourth quarter earnings and help to supply new markets.

Tesoro operates in 17 Western states and reported $5 billion in revenues last year.

E-MAIL: danderton@desnews.com