|Copyright 2015, The Associated Press|
LOS ANGELES (AP) — Exxon Mobil Corp. is selling its troubled Southern California refinery for $537 million to a New Jersey energy company more than six months after an explosion crippled the plant and led to higher gas prices in the Golden State, according to an announcement Wednesday.
PBF Energy Inc., one of the largest independent oil refiners in North America, said it will purchase the Torrance plant that can process 155,000 barrels of crude oil a day.
The refinery 20 miles south of downtown Los Angeles has been shut down since an explosion in February injured four contractors, caused heavy damage at the plant and rocked nearby neighbors with the blast.
California regulators have fined Exxon more than $566,000 for workplace safety and health violations related to the blast.
The shutdown led to a shortage of gas that meets California's stricter pollution regulations and caused higher prices at the pump for drivers in the state.
The plant will be operational before the sale is completed next year, PBF Energy said in a statement.
Tom Kloza, an analyst with the Oil Price Information Service, said the plant reflected a tiny piece of Exxon's global portfolio and the company had been trying to unload it since 2014. The company would have sold it sooner if not for the explosion, he said.
Kloza said the oil giant has had an adversarial relationship with California regulators and he expects greater harmony with PBF owning the plant.
"I really do believe this is good for PBF and Exxon Mobil, and it's good for California consumers," Kloza said. "Having Exxon Mobil operate a refinery in a state that has declared they want to minimize fossil fuels was ... a bad marriage."
The refinery on 750 acres produces 1.8 billion gallons of gasoline a year, which accounts for about 8.3 percent of the state's total refining capacity.
The sale also includes other storage facilities and pipelines, including a 116-mile section that delivers San Joaquin Valley crude to the refinery and pipes that provide access to the Ports of Long Beach and Los Angeles.
Exxon Mobil said 700 employees and 700 contractors work at the refinery. PBF said employees will be offered jobs at the plant.
PBF, based in Parsippany, New Jersey, recently bought another Exxon refinery in Louisiana.
With the Torrance purchase, it will be capable of processing 900,000 barrels of oil daily.