Chevron to sell Pembroke refinery, UK downstream assets to Valero for $1.7B

By Phaedra Friend Troy

US super-major Chevron (NYSE:CVX) has agreed to sell its Pembroke Refinery to Valero Energy Corporation (NYSE:VLO).

Chevron is selling Chevron Limited, which holds the Pembroke oil refinery, as well as other downstream assets in the UK and Ireland. The complete sale price is $1.73 billion, which includes $730 million for the refinery and another $1 billion for the additional downstream assets.

"We're concentrating our downstream portfolio primarily in North America and the Asia-Pacific region -- markets where we enjoy our greatest competitive strength and opportunities for growth," said Mike Wirth, executive vice president of Chevron Downstream & Chemicals.

One of Western Europe's largest refineries, the Pembroke Refinery has a total throughput capacity of 270,000 barrels per day, of which 220,000 barrels per day is crude capacity. The complex can process a large and flexible slate of feedstocks and has access to discounted crudes.

The additional assets include 1,000 Texaco-branded retail service stations across the UK and Ireland, a commercial and industrial fuels business, seven equity-owned terminals, ownership stakes in four pipelines, eight aviation facilities and related support and trading operations.

The agreement is subject to regulatory approvals, but is expected to be completed in the second half of 2011.

Chevron will maintain its upstream, lubricants and Oronite additives business in Europe, as well as its aviation business in Sweden, Greece and the Benelux.

Since 2010, Chevron has agreed to sell downstream assets in more than 20 countries, including a recent sale agreement for most of its downstream assets in Spain.

Additionally, Chevron is soliciting bids for specific operations in the Caribbean and other Central American markets, but is continuing downstream operations in Colombia, El Salvador, Guatemala, Honduras, Panama, Mexico and Brazil.

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