Tesoro CEO: No interest in Valero refineries
SAN ANTONIO (Reuters) - Independent U.S. refiner Tesoro Corp (TSO.N) has no interest in buying any of the Valero Energy Corp (VLO.N) refineries for sale, Tesoro Chairman and Chief Executive Bruce Smith said on Tuesday.
"We don't have any interest in any refineries out there," Smith said.
Economic run cuts continue at Tesoro refineries, which are located in the western United States, because of poor refining margins, Smith told reporters after the company's annual meeting.
"We're not running at maximum throughput at any of our refineries," he said.
Smith declined to reveal the amount of the production cuts at the seven refineries, which have a combined refining capacity of 660,000 barrels per day (bpd). He said that would be announced at a Wednesday morning conference call to discuss first-quarter earnings.
Sources had told Reuters that Tesoro was among the companies bidding on Valero's refineries in Memphis, Tennessee, and Krotz Springs, Louisiana.
Smith said Tesoro never had an interest in the Krotz Springs refinery and only looked at Memphis to get a look at the market.
The Memphis and Krotz Springs plants are among four Valero has up for sale.
Tesoro reported on Tuesday a net loss of $82 million in the first quarter mostly due to a slide in refining margins as crude oil raced to new highs and retail prices failed to keep pace.
In California, the biggest U.S. motor fuel market, there were signs the margin picture was improving, Smith said.
A 35 million-barrel inventory at the beginning of the year has shrunk to 28 million barrels, he said.
"We're at the point if there are any unplanned down times, it will affect margins, but that would only be short term," he said.
Smith said the San Antonio-based company would focus on growing its existing refineries in the coming years and keeping costs down. The company hopes to return to a profit in the second quarter.
Tesoro announced it would scale back its capital budget this year to $870 million from $1.1 billion by delaying or scaling back planned work.
No single project would account for the reduction, instead various portions of projects were shelved until a later date, Smith said.
(Editing by Braden Reddall)
