Unocal, PDVSA to restructure UNO-VEN partnership
El Segundo, Calif., Dec. 26, 1996 -- Unocal Corporation announced today the execution of a letter of intent to restructure The UNO-VEN Company, a partnership held 50 percent by its Midwest 76, Inc., subsidiary.
The letter of intent provides that all of UNO-VEN's petroleum refining and marketing assets will transfer to units of Petroleos de Venezuela S.A. (PDVSA), and Unocal will receive $250 million. PDVSA affiliates will assume all liability for UNO-VEN debt.
The transaction is subject to execution of a definitive agreement, approval by the respective boards of directors of Unocal and PDVSA, and certain regulatory approvals.
UNO-VEN is a petroleum refining and marketing company that markets "76" brand products throughout the midwestern U.S. The 50-50 partnership between Unocal and PDVSA was formed in 1989.
"This transaction would complete Unocal's transition from a vertically integrated oil company to being the world's largest independent oil and gas producer and an important developer of energy projects overseas," said Roger C. Beach, Unocal's chairman and chief executive officer. Beach noted that earlier this month Unocal signed a definitive agreement to sell its West Coast refining, marketing and transportation assets to Tosco Corporation for approximately $2 billion.
If the transaction with PDVSA is completed, Unocal expects to invest a portion of the proceeds in promising upstream and midstream projects overseas and in strengthening Unocal's U.S. oil and gas operations in the Gulf of Mexico area.
"We've shifted our strategic focus to major market-to-resource energy projects," said Beach, citing expansion of the company's operations in Thailand and Indonesia, and new business ventures including the Yadana natural gas project in Myanmar, pipelines to transport crude oil and natural gas from Turkmenistan to markets in Pakistan, an LPG terminal in China, exploration and development opportunities in Bangladesh, Vietnam and Azerbaijan, and an independent power project in Thailand.
UNO-VEN owns and operates a 153,000-barrel-per-day refinery near Chicago, Ill. Through long-term relationships with a network of some 200 midwestern petroleum marketers (wholesalers), UNO-VEN supplies approximately 2,500 independently owned "76" branded retail outlets in 15 Midwest and eastern states. The partnership has 1,100 employees and annual sales of more than $1.2 billion.
The transaction also includes the transfer of a 25 percent interest in The Needle Coker Company from UNO-VEN to PDVSA. The transaction does not include Unocal's sponge coke or the solvents businesses.
Unocal and PDVSA expect to complete the transaction in the first quarter of 1997.
The UNO-VEN Company Fact Sheet
|Refinery||A 153,000-barrel-per-day facility, located southwest of Chicago, in Romeoville, Ill.|
|Lubricants||A lubricants blending and packaging plant in Cincinnati, Ohio, plus two finished lustrong>ricant distribution terminals|
|Terminals||11 company-owned light oil (gasoline, diesel fuel and fuel oil) terminals, an aviation turbine fuel terminal and a commercial network of more than 60 other terminals in 12 midwestern states|
|The Needle Coker Company||50% ownership of this manufacturer of needle coke used to make electrodes for the steel industry|
|Marketing Network||Long-term relationships with 200 midwestern petroleum wholesalers; supplies 2,500 independently owned "76" branded retail outlets in 15 Midwestern and eastern states|
|Market Area/States Served||Markets "76" petroleum products in Illinois, Wisconsin, Minnesota, Iowa, Michigan, Indiana, Ohio, Kentucky, Nebraska, North Dakota, South Dakota, and portions of Missouri, West Virginia, Pennsylvania and New York|
|Crude Oil Supply||UNO-VEN purchases the crude needed for its refinery under a long-term contract with an affiliate of PDVSA. The crude oil is shipped by tank ship to the United States from Venezuela, and then transported by pipeline from the U.S. Gulf Coast to UNO-VEN's refinery near Chicago.|
Updated: December 1996