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UPDATE 1-Tesoro refineries can operate 'very long time' during strike -CEO
February 12, 2015 / 4:48 PM / 3 years ago

UPDATE 1-Tesoro refineries can operate 'very long time' during strike -CEO

(Adds quotes, details on strikes, refinery work plans)

By Kristen Hays

HOUSTON, Feb 12 (Reuters) - Tesoro Corp is confident its refineries in California and Washington can operate with non-union workers for a “very long period of time,” as refinery strikes across the nation enter a 12th day, Chief Executive Greg Goff told analysts on Thursday.

The company also is making plans to restart its shut San Francisco-area refinery, which is now operating as a terminal to enable it to be ready if the work stoppage ends, he said.

Tesoro’s first-quarter refinery throughput outlook of up to 710,000 bpd at its six U.S. refineries assumes the strike could last through March, executives said on a quarterly earnings call.

About 5,400 workers from 11 refineries and chemical plants have been on picket lines since Feb. 1. Talks between the United Steelworkers union (USW), which represents the striking workers and those at 52 other U.S. plants, and industry negotiator Royal Dutch Shell have so far failed to produce an accord.

Those include Tesoro’s shut 166,000-barrel-per-day (bpd) refinery in Martinez, Calif., as well as its 363,000-bpd refinery in Los Angeles and its 120,000-bpd Anacortes, Washington plants, where non-union workers are on the job.

Tesoro was days away from restarting shut units that had undergone maintenance work at Martinez when the strike began, so the company idled the rest of the plant for the duration of the work stoppage.

“Everyone goes through pretty extensive planning because people working at the refineries have to be certified,” Goff said. “We feel very comfortable we can continue running with the staff levels we have for a very long period of time.”

Goff also said the possibility of hiring permanent replacements for striking workers was “something we could talk about at a later point in time.”

The call came a day after Tesoro reported fourth-quarter income of $145 million, compared to a $7 million loss in the same period of 2014. Tesoro also increased its dividend 40 percent to $0.425 per share.

Tesoro plans to shut the Anacortes plant and the company’s 58,000-bpd Salt Lake City, Utah, refinery for planned work at the end of the first quarter, Goff said. He told analysts he sees “no distractions or disruptions” to the Anacortes maintenance if the strike is still ongoing.

The Salt Lake City work, slated to wrap up in the second quarter, will finish a $325 million conversion project to increase the plant’s ability to process Utah’s waxy crude. (Reporting By Kristen Hays; Editing by Terry Wade, Chizu Nomiyama and Paul Simao)

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