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Done Deal

SEATTLE -- Tesoro Petroleum Corp. closed on its deal with Valero Energy Corp. to the 168,000-barrel-per-day (bpd) Golden Eagle refinery in California and 70 Beacon convenience stores.

With the acquisition, Tesoro increases its store count to 270 and moves to 43rd on the Convenience Store News list of Top 50 chains.

The deal was reworked from its original form after Tesoro said in a surprise announcement earlier this month that it may not be able to afford the purchase. Tesoro assumed operational control of the refinery Friday from a trustee.

Valero agreed to sell the Golden Eagle refinery and related assets to Tesoro last fall in order to meet antitrust rules following its deal to purchase refining firm Ultramar Diamond Shamrock.

San Antonio-based Tesoro, an independent oil refiner and marketer operates five refineries in the western United States, with a combined capacity of nearly 390,000 barrels per day.

Reduced Output
In other news, Valero said it would reduce June production at its refineries by 23 percent in the wake of high inventory levels of petroleum products and poor market conditions.

The decision, however, does not impact the company's West Coast operations, according to the Associated Press.

The cuts represent 360,000 barrels per day of 1.5 million barrels per day capacity. Approximately 125,000 barrels will be cut from the company's 960,000-barrel-per-day gasoline production. Another 150,000 barrels per day will be cut from its 560,000-barrel distillate production. In all, Valero has a combined throughput capacity of 2 million barrels per day.