Shell is rumored to be looking for buyers for Martinez refinery

Royal Dutch Shell plc has retained Deutsche Bank to sell its Martinez, Calif., U.S.A. refinery, which is located northeast of San Francisco, according to a Reuters report. The refinery, which has a crude oil refining capacity of 165,000 barrels per day (bpd), has been operating since 1915. The Martinez refinery employs 700 people and produces gasoline, jet fuel, diesel fuel, petroleum coke, industrial fuel oils, liquefied petroleum gas, asphalt and sulphur.

The potential sale could also include a pipeline that delivers crude oil from California’s San Joaquin Valley to the Martinez refinery.

Shell is entering into confidentiality agreements with buyers who may be interested in reviewing the plant’s data ahead of a sale, Reuters said. Shell has reportedly barred potential bidders from retaining their own advisers during the first round of bidding.

New Jersey-based PBF Energy, which bought a similar sized refinery in Torrance, Calif., from ExxonMobil Corp. this year, is a potential bidder, the report said. The Torrance refinery was sold for USD537.5 million plus working capital costs.

Shell is in the midst of a three-year USD30 billion divestment program, following Shell’s purchase of BG Group earlier this year, and continued weakness in oil and gas prices.

Should the sale go through, this would leave Shell with the Anacortes, Wash., Refinery as its only wholly owned refinery in the U.S.

Neither Shell nor Deutsche Bank commented on the Reuters report.

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