Tesoro Corporation: The quintessential American independent refiner



Introducing Tesoro Corporation

Tesoro Corporation (TSO) is a San Antonio, Texas-based independent refiner. Typically found in the United States, Tesoro is a rare breed of energy company. It focuses on refining crude oil into products like gasoline and diesel and marketing and selling them.

Through its retail and marketing operations, which include gas stations and convenience stores under various brands, Tesoro sells its refined products in 17 states.

The company, as the image below shows, concentrates most of its operations in the western United States.

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Refineries and logistics assets

Although Tesoro’s focus is its retail and marketing operations, the bulk of the company’s assets consists of its refineries and logistics assets held by Tesoro Logistics LP (TLLP) master limited partnership (or MLP). Tesoro formed Tesoro Logistics in 2011.

Tesoro (TSO) operates six refineries spread mainly across the western United States, with a combined capacity to process ~850,000 barrels of crude per day (or bpd). This compares to the roughly 3 million bpd of capacity that Valero Energy (VLO), the world’s largest independent refiner and Tesoro’s American counterpart, possesses.

Tesoro Logistics’ operations mainly serve Tesoro’s refining and marketing business. So its assets mirror Tesoro’s refining locations, as seen in the image above.

Tesoro is among top two in ETF

Tesoro Corporation (TSO) is up ~30% even as crude oil fell ~40% over the last six months. PBF Energy (PBF), another outperformer and Tesoro’s peer, is down only about 10% during the same time and is the only other refining stock that’s up in the last month.

This outperformance can be accessed via the Standard & Poors depositary receipt (SPDR) S&P Oil & Gas Exploration & Production exchange-traded fund (or ETF) (XOP). Tesoro and PBF Energy are the fund’s top two holdings. Valero Energy is among the fund’s top five holdings.


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