Cost of closing Oahu refinery saps Tesoro profit

Expenses related to the planned closure of Tesoro’s Hawaii refinery made a significant dent in the company’s profit during the final three months of last year, Tesoro reported Wednesday.

The San Antonio-based refiner reported fourth-quarter net income of $27 million, or 19 cents a share, compared with a net loss of $124 million or 89 cents a share in the fourth quarter of 2011.

The financial results for the latest quarter included after-tax expenses totaling $153 million, or $1.09 a share "primarily attributable" to Tesoro’s plan to close its refinery in Campbell Industrial Park in April and begin turning the facility into an import, storage and distribution terminal. The results also included after-tax expenses of 6 cents a share related to Tesoro’s acquisition of a BP refinery in Southern California. Excluding those items, Tesoro said, it earned $190 million, or $1.34 a share in the fourth quarter.

Tesoro officials reiterated the company’s expectation to realize between $300 million and $350 million in savings by the end of this year as a result of the conversion of the Hawaii refinery.

Tesoro Corp.’s decision to close the refinery and lay off as many as 200 workers is not expected to have a significant effect on prices for gasoline and other fuel products in Hawaii, state officials and energy analysts have said.

The company’s gross refining margin last quarter at its Campbell Industrial Park facility was $3.57 a barrel, compared with a negative $4.33 a barrel in the year-earlier quarter. The refining margin is the spread between the cost of crude oil and price of refined products.

The financial results were released after the market closed. Tesoro shares fell $1.41 to $49.75 in after-hours trading.