Petroplus to sell its share of PBF Energy to partners

In a move with implications for refinery acquisitions in the US and Europe, Petroplus Holdings AG, Zug, Switzerland, has agreed to sell its 32.62% share of PBF Energy Co. LLC, Greenwich, Conn., for $91 million.

By OGJ editors
HOUSTON, Sept. 28
-- In a move with implications for refinery acquisitions in the US and Europe, Petroplus Holdings AG, Zug, Switzerland, has agreed to sell its 32.62% share of PBF Energy Co. LLC, Greenwich, Conn., for $91 million.

Petroplus Holdings has acquired six refineries in Europe since 2000. PBF Energy, formed by Petroplus Holdings in partnership with Blackstone Group and First Reserve in 2008, acquired one refinery in the US this year and has agreed to acquire a second.

Thomas D. O’Malley, former chairman of independent US refiners Premcor Inc. and Tosco Corp., is chairman of both Petroplus Holdings and PBF.

Blackstone and First Reserve are buying the Petroplus interest in PBF.

Petroplus operates a total of 752,000 b/d of crude capacity in refineries in or near Coryton, UK; Antwerp, Belgium; Paris and Strasbourg, France; Ingolstadt, Germany; and Neuchatel, Switzerland.

Last year it idled a 117,000-b/d refinery at Teesside, UK, and is operating it as a marketing and storage facility.

PBF in June completed the acquisition of an idle 190,000-b/d refinery at Delaware City, Del., from Valero Corp. for $220 million and plans to restart it next year (OGJ, June 7, 2010, Newsletter).

More recently a subsidiary, PBF Holding Co. LLC, agreed to buy Valero’s 185,000-b/d Paulsboro, NJ, refinery for $360 million plus the value of working capital estimated to be worth $275 million (OGJ Online, Sept. 27, 2010).

Concerning the sale of the PBF Energy interest, Petroplus Chief Executive Officer Jean-Paul Vettier cited three “primary reasons.”

The deal will enable Petroplus to focus on core European operations, he said. It also will allow Petroplus, which recently “has seen attractive opportunities emerge for growth in Europe” to “acquire more attractive assets by concentrating on European opportunities.”

And it will relieve Petroplus of financial pressure related to PBF’s plans in the US.

“PBF expects to expand at a rapid rate in the United States,” Vettier said. “This would require large investments by Petroplus to maintain our position as the largest owner within the partnership. In view of the difficult financial environment, the board decided that raising further capital to support such an expansion would not be in the best interest of shareholders.”

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