* BP aims to sell two of its five US refineries this year
* Company focusing on Northern Tier plants
* Probation for its U.S. refineries ends this month
By Kristen Hays and Erwin Seba
HOUSTON, March 6 BP Plc is actively
marketing its California refinery, but not its larger Texas
City, Texas plant, the site of a deadly explosion in 2005 that
later underwent a $1 billion overhaul.
Iain Conn, BP's head of refining and marketing, told
reporters at the annual IHS CERA energy conference in Houston on
Tuesday that "we are in the market" with the company's 253,000
barrel-per-day (bpd) Carson, California, refinery and retail
But the company has not yet begun marketing its 406,570-bpd
Texas City, Texas, plant, he said. BP will take that step after
it clears regulatory hurdles primarily set by federal safety
regulator OSHA for completion by the end of the first quarter.
Both plants are drawing interest from would-be buyers, he
BP announced in February 2011 that it would sell the
refineries by the end of 2012 as the company reorients its U.S.
refining operations to take advantage of Canadian crude
"We are moving to a Northern Tier refining strategy," he
said, focusing on three refineries near the Canadian border that
can process that heavy crude oil, which is cheaper than West
Texas Intermediate and much cheaper than other global crudes.
The star of that effort is BP's 405,000 bpd Whiting,
Indiana, refinery, which is undergoing a $4 billion upgrade to
increase its ability to process heavy crude.
Currently, BP's Indiana, Ohio, and Washington state
refineries run a combined 200,000 bpd in Canadian crude with the
Whiting plant absorbing 70,000-80,000 bpd, Conn said.
After the reconfiguration is completed next year, the
Whiting refinery alone will be able to run 350,000 bpd of crude
oil from Canada -- without increasing its overall capacity, he
"We will be making the same product from a cheaper
feedstock," Conn said. "I'm betting inland refineries will do
And that ability to capture benefits of cheap crudes is key
to refining success, he said. Refineries able to process
Canadian crude will be winners, while less complex plants that
depend on more expensive Brent-priced global crudes will
struggle. Several such refineries on the East Coast have already
shut or will shut if buyers do not step up.
Conn also said the company would consider buying another
refinery, but only in Asia, especially in China, where demand
for refined products is growing.
BP's North American products division, which oversees its
U.S. refineries, will wrap up a three-year probation term this
month stemming from the 2005 explosion that killed 15 people and
injured many more.
In March 2009 a federal judge accepted the division's guilty
plea to a felony Clean Air Act violation. The company paid a $50
million fine and began the probation term, which required
compliance with earlier settlement agreements with the U.S.
Occupational and Safety Health Administration and the Texas
Commission on Environmental Quality, the state's air pollution
Conn said nearly seven years after the blast, Texas City's
workers have "turned that refinery from a liability to an
But it does not fit BP's plan to focus on Northern Tier
While other Gulf Coast refineries have increased refined
product exports to Latin America and South America as demand in
the United States decreased, the Texas City plant just sends
products to the U.S. Northeast through the Colonial Pipeline,
"We haven't been exporting internationally," he said.