Unocal to receive $50 million contingency payment from Tosco
El Segundo, Calif., Jan. 12, 2000 -- Unocal Corporation today said it will receive $50 million from Tosco Corporation following resolution of issues concerning contingency payments related to gasoline margins in Unocal's former West Coast refining and marketing system that was sold to Tosco in 1997. This amount will be recorded to earnings in the fourth quarter 1999.
The 1997 sale agreement included provisions for certain payments by Tosco to Unocal should retail gasoline margins change subsequent to the sale.
The settlement does not include potential payments with respect to the difference between California reformulated gasoline and conventional gasoline, which expire in 2003. The maximum potential payment under the remainder of the agreement has been reduced to $100 million.
The $50 million will be paid in two installments. The first $25 million was received in late December and will be recorded in Unocal's fourth quarter 1999 cash flow statement. The balance is to be paid in January 2000.
Unocal Corporation is a leading independent oil and gas exploration and production company with pipeline and power plant development projects worldwide.
Updated: January 2000