THE WALL STREET JOURNAL: Timeline Seen As Key Downfall To Shell-Kelso Deal – Source: “Shell Oil's tight timeline for disposing of its Bakersfield, Calif., oil refinery was a key factor driving away a top bidder, a source familiar with the negotiations said Wednesday. Shell was trying to complete the sale quickly, and the potential buyer was not willing to rush the deal, the source said.” (ShellNews.net) Posted 23 Dec 04

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NEW YORK -- Shell Oil's tight timeline for disposing of its Bakersfield, Calif., oil refinery was a key factor driving away a top bidder, a source familiar with the negotiations said Wednesday. Shell was trying to complete the sale quickly, and the potential buyer was not willing to rush the deal, the source said.

But, the source said, the blame doesn't rest solely with Shell , a unit of Royal Dutch/Shell Group (RD,SC). Kelso & Co. (KSO.XX), a New York-based private investment firm and the leading contender, may have bid too high, scaring away some of its financial backers, the source said.

Shell announced that the deal had collapsed last week, saying it planned to continue negotiations with other bidders.

Shell had originally planned to close the refinery in October, but, under government pressure, agreed to keep it open until March 31, 2005.

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.

Shell has been in discussions with a "short list" of bidders since October, according to company officials.

Paramount Petroleum Corp. was named by sources as a second-place contender, lagging behind Kelso. The California-based refiner of asphalt and military fuel did not immediately return calls on Wednesday.

-By Jessica Resnick-Ault; Dow Jones Newswires; 713-547-9208; jessica.resnick-ault@dowjones.com