Major independent refiner Tosco Corp., Stamford, Conn., said Monday it's taking its first step outside the US market by purchasing all the assets of Irish National Petroleum Corp. Ltd., (INPC) for $100 million, plus the value of crude oil and products inventory.
The assets being acquired include a 75,000 b/d refinery located in Cork, Ireland, and an 8.5 million bbl, deepwater crude oil and oil products storage complex on Bantry Bay.
Tosco said the acquisition of the Bantry Bay facility, where half of the capacity will likely be leased on a long-term basis to Ireland's government for storage of Ireland's strategic petroleum reserves, will improve Tosco's economics in feeding its 450,000 b/d US East Coast refining system and in providing a lower cost crude to the Cork refinery.
Thomas D. O'Malley, Tosco chairman and chief executive, said the Cork refinery has already been upgraded through a $100 million investment over the past 3 years, and is capable of producing low sulfur gasoline and diesel fuels required by the European Economic Community.
The refinery also produces about 30,000 b/d of low sulfur straight run fuel oil.
"Tosco has, from time to time, succeeded in acquiring cargoes of this valuable feed to use in the surplus upgrading capacity at its Bayway Refinery in New Jersey and Trainer Refinery in Pennsylvania," said O'Malley. "It is Tosco's intention to use the full 30,000 b/d at these refineries, once this transaction is complete."
Tosco said it intends to establish its European headquarters in Dublin at the current INPC office and will offer employment to all of INCP's workers. Tosco expects the transaction, already approved by Tosco's board, to close later this year.
Earlier this month, Tosco announced it would acquire BP's 250,000 b/d Alliance refinery in Belle Chasse, La., for $660 million, plus $200 million in hydrocarbon inventories (OGJ Online, July 14, 2000). The acquisition catapulted Tosco to the top US refiner spot with wholly owned refining capacity of 1.35 million b/d and disproved the notion that Tosco was planning to reverse its strategy of acquiring key refining assets.
Tosco funded that acquisition with proceeds from the sale of its 168,000 b/d Avon Refinery in Martinez, Calif., to San Antonio-based Ultramar Diamond Shamrock Corp. for $650 million, plus a $150 million participation fee for the refinery (OGJ Online, July 6, 2000). Earlier this year, Tosco also agreed to acquire Houston-based Equilon Enterprises LLC's 295,000 b/d Wood River, Ill. refinery (OGJ Online, Apr. 17, 2000). That acquisition closed in June.