THE WALL STREET JOURNAL: Shell Couldn't Reach Terms With Bidder For Refinery: “-- Shell Oil said Wednesday it hadn't reached terms with the leading bidder for its crude oil refinery in Bakersfield, Calif. But state officials are still committed to fostering a sale that will allow continued operation of the refinery.” (ShellNews.net) Posted 16 Dec 04
DOW JONES NEWSWIRES
By Jessica Resnick-Ault
Of DOW JONES NEWSWIRES
HOUSTON -- Shell Oil said Wednesday it hadn't reached terms with the leading bidder for its crude oil refinery in Bakersfield, Calif. But state officials are still committed to fostering a sale that will allow continued operation of the refinery.
"I think at this point, both parties have agreed that we've reached an impasse," said Stan Mays, a spokesman for Shell Products U.S., a division of Royal Dutch/Shell Group (RD, SC).
"All I can tell you is that we're going to be getting more details later today," said Tom Dresslar, a spokesman for California's Attorney General Bill Lockyer.
"We have an ongoing antitrust investigation of the refinery's [proposed] closure." As part of that investigation, Dresslar said, the Attorney General's office plans to gain a full understanding of the circumstances that led to the failure of the negotiation.
"I'm not saying we have any indication of bad faith on the part of Shell , but it's important to remember that Shell made a commitment to make a good faith effort to complete a sale, and we intend to hold them to that promise," Dresslar said.
Mays said Shell still plans to continue discussions with other companies. He didn't specify which companies were in the running.
Shell had originally planned to close the refinery Oct. 15, but agreed to keep it open until March 31, 2005, under government pressure. The refinery, capable of processing 66,000 barrels of crude oil a day, provides 6% of California's diesel fuel, as well as 2% of the state's gasoline.
If it were to close, politicians argued, the state's already-high gasoline prices would be pushed up further.
Lockyer has been a prime advocate of keeping the refinery open.
"The Attorney General's objective is to ensure that whoever buys the refinery, that it continue operating over the long term, that it continue providing gasoline to the drivers of this state," Dresslar said.
Shell has been in discussions with a "short list" of bidders since October. Last week, Kelso & Co. (KSO.XX), a New York-based private investment firm, emerged as the leading bidder on the refinery, according to a source familiar with the negotiations.
At that time, the source said Paramount Petroleum Corp., a California-based refiner of asphalt and military fuel, was said to be a second-place contender for the refinery.
Mays said he couldn't confirm which companies were still in the running, or what issues were under discussion with particular bidders.
"We'll continue discussions with other bidders, and review our options," he said.
-By Jessica Resnick-Ault, Dow Jones Newswires;