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Answers will take some time, because the deal announced Tuesday will not close until near the end of the year. Sinclair Oil Corp. priced the overall transaction at close to $300 million, when inventory and other purchases are factored in.
The Sinclair statement also expressed confidence that "most" of the west Tulsa refinery's 298 employees will retained by the buyer. But Holly CEO Matt Clifton was more circumspect, noting that the final employee count will come as the integration plan is defined.
The Holly refinery, about two miles from the Sinclair facility, currently employs about 360 people. Dallas-based Holly acquired its plant from Sunoco Inc. in June for $65 million.
Holly will operate the Sinclair plant as a combined unit with the former Sunoco refinery. Together, the refineries will produce about 125,000 barrels per day of gasoline, diesel, speciality lubricants and other products.
Sinclair spokesman Clint Ensign said the Salt Lake City-based company regrets the end of its 26-year refining presence in Tulsa but plans to continue operating its wholesale gasoline marketing operations in Oklahoma. Sinclair bought the facility from Texaco in 1983.
"We have appreciated the business climate in Oklahoma," Ensign said. "There's been some very fine workers we've had the privilege of being associated with."
Sinclair had planned
a $1 billion expansion since 2005, but shelved the project in the depths of the recession last year. Holly will not restart the expansion effort, at least in the near term.
An Oct. 14, 2008, Tulsa World story detailed the arrival of two giant coke drums to the Tulsa Port of Catoosa. Sinclair had the enormous pieces shipped from Japan with the expectation of delivering them to the refinery early this year.
Various Sinclair expansion pieces remain on the port's industrial park grounds and will so for a while. Port Director Bob Portiss said the company recently signed a one-year lease to store equipment -- estimated at 600 tons -- at the Catoosa site.
Sinclair could eventually move the pieces to another refinery, such as the Wyoming plant, marked for its own upgrade, or it could sell the pieces to another company.
"It's a safe bet that it's up in the air," Portiss said. The storage lease "is a smart thing to do. We welcome it and we'll be glad to keep it for them."
Sinclair is hoping to finish federally mandated environmental upgrades by the end of this year. In January 2008, Sinclair Tulsa Refining Co. was one of three subsidiaries to reach an agreement to spend at least $72 million on reducing air pollution at the Tulsa and Wyoming plants.
Holly CEO Clifton noted that Sinclair already had upgraded its facilities to produce ultra low-sulfur diesel. Those improvements eliminated the need for Holly's own $150 million upgrade planned at the Sunoco refinery.
Holly will reimburse Sinclair about $16 million for its environmental upgrade expenditures, Clifton said. The company also plans some improvements at Sunoco.
Holly also announced Wednesday that it would offer $100 million in senior unsecured notes to help fund the Sinclair acquisition. The 9.875 percent notes will come due in 2017.
If the Sinclair deal falls through, Holly will use the proceeds for other corporate purposes, including working capital, expenditures and other future acquisitions, the company said in a news release.
Rod Walton 581-8457 rod.walton@tulsaworld.com
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