Exxon Corp. is shaking up its U.S. refining and marketing operations.
The company agreed to sell its Bayway refinery in Linden, N.J., to Tosco Corp., Stamford, Conn. In addition, it will bow out of retail gasoline marketing in three southern Florida counties.
Both operations are handled by Exxon's Exxon Co. U.S.A. unit.
BAYWAY SALE
Tosco agreed to pay $175 million for the 200,000 b/d Bayway refinery, the largest refinery on the U.S. East Coast. The deal is to close by Apr. 1, 1993.
The plant is capable of refining high sulfur crudes. It has the largest fluid catalytic cracking unit in the world and has considerable flexibility to change raw material input and product output to respond to changing marketing conditions.
With the purchase, Tosco, the largest independent refiner on the West Coast, will become the second largest independent refiner in the U.S. as measured by crude distillation capacity.
Tosco expects revenues to double to about $4 billion/year.
Thomas D. O'Malley, Tosco chairman, said the company plans to operate Bayway at higher production rates than Exxon has in recent years and will be aided by concurrent product sales contracts and by being a delivery point for the New York Mercantile Exchange.
"We also believe the facility will warrant a capital modernization program," O'Malley said.
Exxon agreed to take appropriate responsibility for environmental obligations associated with the plant, which began operation in 1909 and is Exxon's oldest U.S. refinery.
It employs about 950 people, most of which will remain employed at Bayway, Tosco said.
Exxon plans to halt wholesale marketing of heating oil and liquefied petroleum gas in certain markets, but said sales contracts will be honored.
Exxon Chemical Co.'s Bayway lube oil additives operation and Exxon Co. U.S.A.'s turbine oil operation at Bayway are not included in the sale. Exxon will continue to manufacture and market those products.
RETAIL DEAL
Exxon plans to stop motor fuel sales through retail outlets in Broward, Dade, and Palm Beach counties, Fla.
It is exchanging about half of the 133 Exxon service stations in those counties for about 60 Chevron U.S.A. Products Co. service stations in Baltimore, Tidewater, Va., and Washington, D.C.
Chevron is discontinuing branded gasoline sales in those areas.
The agreement calls for Chevron to offer franchises to Exxon dealers at the Florida service stations marked for exchange.
At the Exxon stations not traded with Chevron, dealers will be extended offers to buy Exxon's interest in the properties.
Exxon service station properties not bought by dealers will be sold.
Chevron plans to seek offers from other companies for the remaining stations in the areas it is vacating.
The transaction, which has been reviewed by the Federal Trade Commission, is to be complete June 30, 1993.
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