Unocal, Tosco sign agreement for sale of Unocal's West Coast downstream assets
El Segundo, Calif., Dec. 16, 1996 -- Unocal Corporation today said that its Union Oil Company of California subsidiary and Tosco Corporation signed a definitive agreement for the sale of Unocal's West Coast petroleum refining, marketing and transportation assets. The sale is valued at approximately $2 billion.
The assets to be sold are currently operated by Unocal's 76 Products Company business unit, which is headquartered in Costa Mesa, Calif. The company expects the sale to close in the first quarter 1997.
"This sale is an important step in Unocal's transition from a mid-sized, regional integrated oil company to being the world's largest independent oil and gas producer with a major focus on project development," said Roger C. Beach, Unocal chairman and chief executive officer. "With this sale, we look to shifting significant resources to potentially high-return opportunities in the fast-growing economies of Asia and strengthen our resource base in the Louisiana/Gulf of Mexico region."
The company has said it expects to use the proceeds from the sale to invest in new projects, reduce debt by about $800 million and buy back up to $400 million of the company's common stock.
The fixed assets to be sold include Unocal's California refineries in San Francisco, Santa Maria and Los Angeles, which have a combined capacity of 251,000-barrels per day; various terminals, bulk plants and pipelines; Unocal's lubricants business; Unocal's retail marketing business, including 1,100 controlled sites and 250 unbranded, non-controlled sites in six Western states; the company's commercial and industrial petroleum products business; credit card systems; and other assets.
Unocal expects to record a $375 million aftertax book loss in the fourth quarter 1996 as a result of the sale.
The sale is subject to approval by Tosco shareholders and clearance by various regulatory agencies, and the satisfaction of certain other conditions. Tosco plans to use debt and equity financing for the purchase.
Updated: December 1996