ExxonMobil is Selling California Torrance Refinery

Exxon Mobil Corp. has put its Torrance, California, refinery on the block, according to two people familiar with the matter, making it the latest big oil company to consider exiting the state amid tougher environmental standards.

“Torrance has been looked at extensively,” said one of the people, who was not authorized to speak about the sale.

The 155,000 barrel per day (bpd) refinery, in the south part of Los Angeles, is Exxon’s only refinery in California and the second-smallest of its half-dozen plants in the United States.

An Exxon Mobil spokesman said the company does not comment on market rumors or speculation, adding that the firm “regularly evaluates its global portfolio of businesses and opportunities for growth, restructuring or divestment, in accordance with the company’s overall strategic business objectives.”

He said ExxonMobil remains committed to conducting business in California.

BP halted refining in the state with the sale of its Carson, California, plant to Tesoro last year. Shell sold its Wilmington refinery to Tesoro in 2007, leaving it with a single plant in the state.

California’s environmental regulations make it a difficult state for refiners to operate in. Refiners including Chevron, Phillips 66, Tesoro and Valero already operate two or more refineries in the state, limiting their ability to buy others.

Despite regulatory difficulties, PBF Energy Inc has said it has mulled refinery purchases in the state.

PBF has been “looking at opportunities particularly in California, and we say particularly in California because that’s where most of the opportunities have been, it’s a market where we have as a team experience, it’s a very difficult market,” Executive Chairman Tom O’Malley said on the company’s earnings call last month.

“I always warn our team that when we look at California, we must look at it to some degree almost as a different country and as a different set of requirements, but we’re familiar with them and certainly we have lived with them in the past.”

PBF did not immediately respond to a request for comment.

Other potential buyers could include private equity firms, according to the two people.

Exxon’s Torrance refinery has imported crude from Australia, Ecuador, and Chad since 2012, according to Energy Information Administration data.

(Reporting By Jessica Resnick-Ault; Editing by David Gregorio; http://goo.gl/zGHRt8)