Shell Issues Update on Bakersfield Refinery Sales Process
September 22 2004 - 12:07PM
PR Newswire (US)
Shell Issues Update on Bakersfield Refinery Sales Process HOUSTON,
Sept. 22 /PRNewswire/ -- Shell Oil Products US today released an
update on the status of the potential sale of its Bakersfield
Refinery. Shell announced last month that it would continue to
operate the plant until March 31, 2005 so as to allow the sales
process to fully mature. Future updates will be posted on the
Internet at http://www.shellbakersfieldrefinery.com/ . "We have
received numerous inquiries on the status of the sales process,"
said Lynn Laverty Elsenhans, President of Shell Oil Products US.
"We believe that the issuance of updates will provide insight into
our efforts and will allow anyone who is interested in this process
to receive timely and accurate information." The sales process is
ongoing, and Shell is actively engaged in discussions with several
companies regarding their interest in the plant. Although there is
a need to maintain a high level of confidentiality in the process,
there are key issues and milestones that can be shared. More Than
70 Parties Have Talked To Shell About The Refinery As of today,
Shell has received inquiries or actively solicited bids in the sale
of the refinery from more than 70 parties. Over 20 companies have
signed confidentiality agreements, allowing them to formally enter
the sales process. These companies have been provided extensive
data regarding the refinery assets and operations along with a
draft purchase agreement outlining the terms and conditions that
Shell proposes for a sale. Those companies requesting a
presentation have had an opportunity to meet with management
representatives who provided information on the plant. Companies
have also had the opportunity to submit questions to Shell, and
Shell has provided further information responsive to the questions.
Bids Have Been Submitted A number of companies in the sales process
have provided Shell with a bid stating the price they would pay for
the refinery and any additional terms and conditions they would
propose. Shell is presently evaluating these proposals and will
develop a short list of companies from which we will seek
additional information or clarification. In fairness to those
companies that have been involved in the sales process to date,
this process is now closed to new entrants. Negotiations Continue
Shell expects that negotiations with potential buyers will continue
into the fourth quarter of 2004. If agreement on a sale were
reached, an announcement would be made at that time. Should no
purchase agreement result, Shell will announce that the sales
process has been unsuccessful, and the refinery closure plan will
continue as announced. If a sale occurs, actual transfer of
ownership would most likely occur during the first quarter of 2005,
subject to approval by appropriate regulatory authorities. Terms
And Conditions Of A Sale Will Allow Continued Operations While we
cannot comment on any specific terms and conditions proposed by any
party, we believe the terms and conditions proposed by Shell
reflect market realities. As with any commercial transaction,
certain terms and conditions are subject to negotiation between the
prospective buyer and seller. Shell has proposed that the refinery
be sold as an operating facility, including all process units,
land, and related equipment. In addition, Shell would lease the
products terminal located adjacent to the refinery and associated
tanks to the purchaser of the refinery under a long-term agreement,
which would give the refinery purchaser full control of the
terminal as long as the refinery produces gasoline and diesel. In
this way, should the refinery cease to operate, Shell could still
provide fuel to consumers in the Bakersfield area. The lease
arrangement assures that either a refinery buyer or Shell would
operate the terminal and provide the businesses and residents of
the San Joaquin Valley with fuel. The refinery is currently served
by Shell-owned and third party-owned pipelines. As is common in
many refinery sales, these pipelines are not included in the
proposed sale. Shell has offered to transport crude and products on
certain of its lines under competitive terms, and Shell has
committed to work with buyers to increase or offer alternate
pipeline capacity in certain corridors should the buyer's crude
supply program require. Summary Shell will continue to work with
our customers, our employees, the community, and various
governmental agencies throughout the process to keep them informed.
Shell Oil Products US, a subsidiary of Shell Oil Company, is a
leader in the refining, transportation and marketing of fuels, and
has a network of nearly 7,000 branded gasoline stations in the
Western United States. Shell Oil Company is an affiliate of the
Royal Dutch/Shell Group of Companies (NYSE:RDNYSE:SC). For more
information, please visit http://www.shell.com/ . DATASOURCE: Shell
Oil Products US CONTACT: Stan Mays of Shell Oil Products US,
+1-713-241-1582 Web site: http://www.shell.com/
http://www.shellbakersfieldrefinery.com/
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