PBF Energy made a lot of money by buying the shuttered Delaware City Refinery from Valero.
It may be looking to repeat that winning streak as it takes a look at the Texas company’s refineries in California.
Bloomberg reported that PBF Chairman Thomas O’Malley told industry analysts the company is interested after the CEO of Valero said its Golden State refineries are not performing particularly well.
PBF reported strong first quarter earnings as its savvy crude oil buying practices and the use of rail transport of lower priced crude to Delaware City paid off.
A day after Valero Energy Corp. described its California operations as “our weakest group,” PBF Energy Inc.’s chairman said he’s interested in buying a site in the Golden State.
O’Malley headed Tosco Corp., which operated a California refinery.
Valero struggled with the Delaware City Refinery, with operating problems and high crude prices leading to a loss of a $1 million a day at one point, according to the company.
PBF simplified the operation of the refinery after a year-long turnaround and the company went on to acquire a refinery in nearby Paulsboro, N.J. and Toledo, Ohio. Stock is now traded on the New York Stock Exchange with annual revenues totaling about $16 billion.
PBF executives have the experience necessary to run refineries there, Chairman Tom O’Malley said on a conference call with analysts today. O’Malley was chief executive officer of Tosco Corp., which operated what is now Tesoro Corp.’s Golden Eagle plant near San Francisco.
Valero has refineries in northern and southern California. Like Delaware, California has tough environmental standards. Any refinery faces the possibility of breakdowns and equipment failures that can hit earnings.
To date, PBF has not seen any major problems with Delaware City from an operating standpoint, although environmental activists remain wary about the stance of the company.
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via PBF eyes California refineries as Valero calls them weakest | Hydrocarbon Processing | April 2014.
