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Premier People,
Products and Services
NEWS RELEASE
Premcor Inc.
8182 Maryland Avenue
Suite 600
St. Louis, Missouri 63105
314-854-9696
314-854-1580 fax
PREMCOR TO CLOSE HARTFORD, ILL. REFINERY IN OCTOBER
ST. LOUIS, February 28, 2002 - Premcor announced today that it has
informed employees at its Hartford refinery that it will discontinue refining
operations in October 2002.
Thomas D. O'Malley, chairman, chief executive officer and president of
Premcor stated: "We have evaluated the feasibility of upgrading our Hartford
refinery to meet future low-sulfur gasoline and diesel fuel specifications and
have been unable to justify the significant investment that would be necessary
to remain operational." In order for Premcor to meet the deadline for the
introduction of low sulfur gasoline regulations, a significant capital
investment would have to begin in the fourth quarter of 2002.
"Employee safety and the environment will continue to be Premcor's
focus during the transition period prior to closing the refinery," said
O'Malley. Additionally, Premcor will continue to pursue all opportunities,
including a sale of the refinery, to mitigate the loss of jobs and refining
capacity in this area. However, there is no assurance that the company will be
successful in this regard.
Due to the planned discontinuation of operations, The Premcor Refining
Group Inc., an indirect wholly-owned subsidiary of Premcor Inc. and a direct
wholly-owned subsidiary of Premcor USA Inc., will take a pretax charge to
earnings of approximately $120 million, at least a portion of which will be
taken in the first quarter. This charge would include asset write-downs, and
accruals for employee severance, future environmental expense and other exit
costs. The actual expenditures for these items would occur over several years
following the shutdown.
Premcor operates two other refineries, the Port Arthur facility with a
capacity of 250,000 barrels per day (bpd) and the Lima Ohio refinery with a
capacity of 160,000 bpd. O'Malley stated that he expects both plants to be able
to meet the new fuel specifications in a timely manner.
Premcor Inc., through its principal operating subsidiaries, The Premcor
Refining Group Inc. and the Port Arthur Coker Company L.P., is one of the
largest independent petroleum refiners and marketers of unbranded transportation
fuels, heating oil, petrochemical feedstocks, petroleum coke and other petroleum
products in the United States. The company has an aggregate 490,000 bpd of crude
distillation capacity at its three refineries located in Port Arthur, Texas
(250,000 bpd), Lima, Ohio (170,000 bpd) and Hartford, Illinois (70,000 bpd).
This press release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995, including the
company's current expectations with respect to future market conditions, future
operating results and the future performance of its refinery operations. Words
such as "expects," "intends," "plans," "projects," "believes," "estimates,"
"may," "will," "would," "should," "shall," and similar expressions typically
identify such forward-looking statements. Even though Premcor believes the
expectations reflected in such forward-looking statements are based on
reasonable assumptions, it can give no assurance that its expectations will be
attained. Factors that could cause actual results to differ materially from
expectations include, but are not limited to, operational difficulties, varying
market conditions, potential changes in gasoline, crude oil, distillate and
other commodity prices, government regulations, and other factors contained from
time to time in the reports filed with the Securities and Exchange Commission by
the company and its subsidiaries, including Sabine River Holding Corp., Premcor
USA Inc. and The Premcor Refining Group Inc., including quarterly reports on
Form 10-Q, reports on Form 8-K, and annual reports on Form 10-K.
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Contacts:
Investors: Media:
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Karen Davis Jim Joyce
(314) 854-1424 (314) 854-1511