Oil giant BP will unload its Southern California gasoline business, including the huge Carson refinery and its local Arco gasoline operations, as part of a broad overhaul following last year's Gulf of Mexico oil spill.
BP said Tuesday that it also would sell its Texas City, Texas, refinery, where a 2005 explosion and fire killed 15 people and injured more than 170 others. The sale of the California and Texas facilities will cut BP's refining capacity in half as it moves to divest $30 billion in assets to pay gulf disaster costs.
In the process, BP will reshape California's energy landscape, where Arco for decades has vied with Chevron Corp. for the top spot in fuel retailing and refining.
"They are selling their 800-pound gorilla," said Charles Langley, senior gasoline analyst at the Utility Consumers Action Network in San Diego. "It will be interesting to see who regulators will allow to buy it because there are almost no current players in the California refining market who could buy it without dominating the market completely."
At the 630-acre Carson refinery, about 1,200 employees and 500 contractors process 265,000 barrels of oil a day into gasoline, diesel, jet fuel and petroleum coke, supplying about 25% of Los Angeles' gasoline demand, said BP, which bought Arco in 2000. The refinery also supplies Arizona and Nevada.
BP said it expected to get at least $4.4 billion for the refineries, which represent about 28% of its global refining capacity, and the Los Angeles marketing operations. Sales are anticipated to be wrapped up by the end of 2012, the company said.
Langley expressed concern about what the planned sale would mean for motorists.
"Only if we get a new player buying this refinery could it be good for consumers," he said. "We used to have 21 refineries. Now we have 10 refineries owned by seven companies, and we've already seen consolidation that is anticompetitive."
Also Tuesday, BP posted a 30% increase in fourth-quarter profit to $5.57 billion and said it would resume paying a quarterly dividend, which the British energy company had suspended after the gulf disaster. At 7 cents a share, the dividend for the fourth quarter is half the old dividend, but the company said it intended to boost the payout as finances improved.