Tesoro First Quarter 2002 Earnings Update

SAN ANTONIO--(BUSINESS WIRE)--Feb. 21, 2002--Tesoro Petroleum Corporation
(NYSE:TSO - news) announced today that due to continued deterioration in market
fundamentals and the ongoing scheduled turnaround of its Washington refinery,
management expects first quarter 2002 earnings to be below breakeven levels.

"Industry spreads are well below historical levels in all our refining regions,"
stated Bruce Smith, chairman, president and CEO of Tesoro. "So far this year,
industry spreads have averaged about $2.75 per barrel below the average spread
seen during the fourth quarter of 2001. Normal seasonal factors make first
quarter profitability more unpredictable, since margins for the first two months
are typically weak.

"March is generally the strongest month of the quarter, as gasoline demand and
margins improve. This year, the predictability of March results are compounded
by the uncertain near-term seasonal demand growth and the Washington turnaround
which is scheduled to be completed in mid-March."

The company anticipates if the current industry margin environment persists that
earnings could be below the current First Call consensus of a loss of $0.09 per
share.

"Notwithstanding the uncertain first quarter outlook, we believe seasonal
gasoline demand and announced industry throughput reductions will reduce
inventory levels and improve margins. While we anticipate margin improvement, we
do not believe margins will be as strong as 2000 and 2001 margins levels.

"But, with the full year benefit of the Utah and Mandan acquisitions, the start
up of our heavy oil project next month and the completion of our pending Golden
Eagle asset acquisition next quarter, we believe that 2002 earnings per share
will be stronger than the $2.10 per share earned last year," stated Smith.

Tesoro Petroleum Corporation is an independent refiner and marketer of petroleum
products and provider of marine logistics services. Tesoro operates five
refineries in the western United States with a combined capacity of 390,000
barrels per day. Tesoro's growing retail marketing system includes more than 600
branded retail stations, of which approximately 200 are company owned and
operated under the Tesoro and Mirastar brand.

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 expectations of earnings per share, industry expectations
including margin improvements, performance of the heavy oil conversion project,
completion of the pending Golden Eagle Asset Acquisition and the Washington
refining turnaround. Factors which may cause actual results to differ from those
forward-looking statements include: changes in general economic conditions, the
timing and extent of changes in demand for refined products, availability and
cost of crude oil, other feedstocks or of refined products, the price
differentials between light and heavy crude oils and light and heavy refined
products, throughput and yield levels, disruptions due to equipment
interruptions or failure at Company or third-party facilities, execution of
planned capital projects and other factors beyond the Company's control. For
more information concerning factors that could cause such a difference, see the
company's annual report on Form 10-K and quarterly reports on Form 10-Q, filed
with the Securities and Exchange Commission. The company 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 the Company becomes aware of, after the date hereof.

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Contact:

     Tesoro Petroleum Corporation, San Antonio
     Investor Relations:
     John Robertson, 210/283-2687
     or
     Public Relations:
     Tara Ford, 210/283-2676


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