Tesoro updates status of debt-reduction plan

Tesoro Petroleum Corp., San Antonio, has updated its debt-reduction plan announced last month, when the company said it planned to reduce its debt by $500 million by yearend 2003.

July 8, 2002

By OGJ editors

HOUSTON, July 8 -- Tesoro Petroleum Corp., San Antonio, has updated its debt-reduction plan announced last month, when the company said it planned to reduce its debt by $500 million by yearend 2003.

"Our first priority is to strengthen our balance sheet—immediately," said Bruce A. Smith, Tesoro chairman, president, and CEO. The company's overall goal is focused on several strategic initiatives, including optimizing its working capital, reducing costs, selling some of its assets, and concentrating on the synergies created through its recently acquired Golden Eagle refinery from San Antonio-based Valero Energy Corp. (OGJ, June 10, 2002, p. 38).

Tesoro has delivered bid packages for the assets deemed as viable candidates for divestiture, Smith said, adding that the "initial expressions of interest have been encouraging."

Smith added, ". . .at the end of the second quarter, the Golden Eagle refinery throughput was around 160,000 b/d after completing its planned turnaround ahead of schedule. Also, the CARB III project is proceeding on schedule and within budget. After scheduled debt payments of $15 million and June's capital program, we still had over $54 million of cash invested at the end of June."