News & Features

Tesoro CEO says expects more refinery closures

Posted on February 4, 2010

(Reuters) – Tesoro Corp (TSO.N) Chairman and Chief Executive Bruce Smith said on Wednesday he expected that more U.S. refineries will close in 2010 and may include plants operated by major oil companies.

“I think you will see more closures,” Smith said in a webcast of a presentation to the Credit Suisse Energy Conference in Vail, Colorado. “I think we’ll even see some majors.”

Since January 2009, three U.S. refineries with a combined throughput of 425,000 barrels per day have been shuttered, but Smith said reductions in refinery production due to poor margins has effectively cut U.S. refining capacity by nearly 1.7 million bpd.

On Wednesday, the U.S. Energy Information Administration said refinery utilization last week was 77.7 percent of national capacity, its lowest level since the mid-1980s, excluding shutdowns forced by hurricanes.

Smith said negotiations by PBF Investments to buy Valero Energy Corp’s (VLO.N) shuttered refinery in Delaware City, Delaware, was the exception and not the rule.

“There are not a lot of buyers out there,” he said.

Tesoro is a leading western U.S. independent refiner with seven refineries that have a combined processing capacity of 666,000 bpd. (Reporting by Erwin Seba; Editing by Walter Bagley)