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Tesoro to keep refinery open
by The Associated Press
Tesoro Petroleum Corp. said May 3 it will continue to operate its Kenai refinery but will consolidate some of its marketing operations in Anchorage and close several retail outlets in Anchorage, Fairbanks and Kenai.
Company president Bruce Smith announced the decision May 3 at a news conference in San Antonio, Texas, and also reported a first-quarter profit of $6.3 million. Tesoro posted a $9 million loss in the same period a year ago. Revenue rose to $1 billion from $493 million a year ago. The company credited higher gasoline prices for the turnaround.
Tesoro spokesman Ron Noel said the changes planned for the company’s Alaska operations will result in the layoff of about 21 people in its marketing, credit card and convenience store operations. The changes are expected to save between $3 million and $4 million.
The company had said in February that it was considering closing its Kenai refinery and launched a 60-day review to study its options. Tesoro’s refining and retail operations in Alaska lost a combined $3 million last year. Smith said it will look for ways to cut costs instead of closing the refinery.
“The study showed this option has more potential benefit to our shareholders,” he said.
No significant new capital to Kenai refinery The company will not commit any significant capital to the Kenai refinery beyond what’s needed for maintenance, safety and environmental compliance, Smith said.
The Tesoro refinery employs 170 of the 500 Tesoro workers in Alaska. It is one two refineries that produce most of the gasoline consumed in Alaska. The other is the Williams Cos. refinery at North Pole.
Tesoro has 30 company-owned gas stations and convenience stores in Alaska. Another 150-plus independent stations sell Tesoro gasoline.
Noel said the company will be closing two of its underperforming retail outlets in Anchorage by July 1 and three more by the end of the year. One Tesoro store in Kenai and one in Fairbanks will also close by the end of the year. The employees at those retail outlets will be offered jobs at other stores, Noel said.
“We don’t think any of those people will be laid off because we always have very high turnover in those stores, so we think we’ll be able to place all those employees,” he said.
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