HOUSTON (Reuters) - Valero Energy Corp (VLO.N) wants to sell its pair of California refineries and has brought in Citigroup (C.N) to help shop them around to potential buyers, the Wall Street Journal reported on Friday, citing unnamed sources.
Valero spokesman Bill Day declined comment on the issue. However, he noted that Valero Chief Executive Bill Klesse told analysts nearly a year ago that the company was considering options for the two plants in light of a 2006 California law that requires emissions to match 1990 levels by 2020, which could cost hundreds of millions of dollars in upgrades to achieve.
That law requires the California Air Resources Board (CARB) to craft regulations to meet the law’s emissions reduction requirement.
During Valero’s third-quarter 2011 conference call, an analyst asked if long-term viability of Valero’s California refineries could be in question given the looming regulations.
“We’re looking at our options,” Klesse replied.
Valero operates a 132,000 barrel-per-day (bpd) San Francisco-area refinery in Benicia and a 78,000 bpd Los Angeles-area refinery in Wilmington. Those are among 16 petroleum refineries that Valero owns in the United States, Canada, the United Kingdom and Aruba.
Reporting By Kristen Hays