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EXHIBIT 99.1
FOR IMMEDIATE RELEASE
CONTACTS:
SUSAN PIROTINA, VICE PRESIDENT, COMMUNICATIONS, TESORO (210) 283-2631
SARAH HOWELL, PRESS RELATIONS, BP P.L.C., (917) 882-3714
TESORO TO ACQUIRE REFINERIES AND MARKETING OPERATIONS FROM BP
SAN ANTONIO - JULY 17, 2001 - Tesoro Petroleum Corporation (NYSE:
TSO) and BP p.l.c. (NYSE: BP) announced today that they have reached an
agreement for Tesoro to acquire BP's Mandan, North Dakota and Salt Lake City,
Utah refineries and associated storage, pipeline, distribution and gasoline
marketing operations for $677 million, excluding working capital.
Upon completion of the deal, BP will transfer ownership of the two
refineries, associated North Dakota crude and product pipelines, bulk storage,
eight product distribution terminals, and 45 retail gasoline stations to Tesoro.
BP will also assign to Tesoro contracts for about 300 Amoco-branded stations
that are owned by about 80 Amoco-branded gasoline jobbers.
Subsequent to the transaction, Tesoro will own and operate five
refineries with a combined throughput capacity of 390,000 barrels per day. In
addition, Tesoro's branded retail network locations will expand to approximately
640 retail locations while adding approximately 700 employees to Tesoro.
Tesoro and BP will quickly seek required regulatory approvals and hope
to close the acquisition in the early part of the fourth quarter. The two
refineries plan to continue to operate normally during the sales process and
will meet all existing product supply commitments.
BP's Salt Lake City refinery has a crude oil capacity of 55,000 barrels
per day and is the largest of four refineries in Utah. More than half of its
production is gasoline, with principle other products of diesel and jet fuel.
The Mandan refinery, which is located near Bismarck, North Dakota, has a rated
capacity of 60,000 barrels per day and produces mostly gasoline, with the
balance in distillates, jet fuel and other products.
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Tesoro expects the transaction, which will be financed with debt, to
be accretive to earnings and cash flow beginning in the fourth quarter of 2001.
"We believe that these additions improve our ability to rapidly supply markets
in areas that we have previously targeted for retail and commercial marketing
expansion. These operations obviously complement our Mirastar investment
program. Finally, we are excited about the opportunity to build new business
partnerships with both the employees and the independent marketers in these
areas," stated Bruce Smith, Tesoro's Chairman, President and Chief Executive
Officer.
"We are delighted that Tesoro has recognized these refineries and
related operations are top performers, and that they plan to offer employment to
all of the current workforce. This is an important reassurance to our employees,
the markets and the communities served," said Robert A. Malone, BP's Regional
President for the Western US. "Today's milestone agreement ensures the markets
supplied by the Salt Lake City and Mandan refineries will have their ongoing
demand for gasoline and other petroleum products supply met."
Malone noted that the divestment was consistent with BP's global
refining strategy, announced in 1999, of retaining only those refineries which
provided advantaged supplies for its marketing operations - particularly in the
provision of clean fuels - or where integrated with other parts of the business
such as chemicals.
Lehman Brothers served as financial advisor to Tesoro while Rothschild
Inc. served as financial advisor to BP.
TESORO WILL HOST A CONFERENCE CALL RELATED TO THE TRANSACTION ON
TUESDAY, JULY 17, 2001 AT 1:00 P.M. EDT (12:00 P.M. CDT) TO DISCUSS THIS
RELEASE. INTERESTED PARTIES MAY LISTEN TO THE LIVE CONFERENCE CALL BROADCAST
OVER THE INTERNET ON THE COMPANY'S WEBSITE AT HTTP://WWW.TESOROPETROLEUM.COM. A
CORRESPONDING SLIDE PRESENTATION WILL ALSO BE AVAILABLE ON THE WEBSITE. THIS
PRESENTATION WILL BE ARCHIVED ON TESORO'S INTERNET SITE FOLLOWING THE
PRESENTATION.
Individuals wishing to listen to Tesoro's presentation will need
RealPlayer, which can be downloaded free of charge from http://www.real.com.
Please allow at least 15 minutes to complete the download.
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Tesoro Petroleum Corporation is an independent refiner and marketer of
petroleum products and provider of marine logistics services. Tesoro operates
three refineries in the western U.S. with a combined capacity of 275,000 barrels
per day. Tesoro's branded retail network is currently comprised of approximately
300 stations, of which more than 100 are company owned and operated.
BP is an international energy company involved in the exploration of
crude oil and natural gas; refining, marketing, supply and transportation of
hydrocarbons; manufacturing and marketing of petrochemicals; solar power
systems; and gas-fired power generation. Visit BP's website at www.bp.com.
This news release contains certain statements that are "forward-looking"
statements within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. These forward-looking
statements contain projections as to the expected effects of the acquisition on
future earnings and cash flows. Factors which may cause actual results to differ
from those forward-looking statements include, changes in general economic
conditions, disruptions due to equipment interruptions or failure at Tesoro or
third-party facilities, and other factors beyond Tesoro's control. For more
information concerning factors that could cause such a difference, see Tesoro's
annual report on Form 10-K and other of Tesoro's reports filed with the
Securities and Exchange Commission. Tesoro undertakes no obligation to publicly
release the result of any revisions to any such forward-looking statements that
may be made to reflect events or circumstances that occur, or which Tesoro
becomes aware of, after the date hereof.