Digging up a surprise
Founded in 1955 to extract oil from shale rocks, Tosco is currently the leading independent oil refiner and petroleum marketer in the U.S., with seven refineries in California, New Jersey, Pennsylvania, and Washington. In 1997, Tosco expanded its oil and gas operations further by paying Unocal $2 billion for its three oil refineries. The company has recently modernized its largest refinery, a move that led to the layoff of 12 percent of its workforce in order to cut costs.
Gaining some ground
Tosco began its acquisition of retail outlets in 1994 with the purchase of British Petroleum's 500 West Coast gas stations. The 1997 Unocal acquisition added 1,350 West Coast "76" gas stations. Also, Tosco acquired Circle K, the nation's second-largest operator (after Southland's 7-11) of company-owned convenience stores. The purchase added 2,500 stores in 28 states and 900 stores in 19 other countries. In March 1999, the company sold 320 of its stores located in the Midwest, Texas, Utah, and Colorado for $125 million because the stores were lacking in productivity. Tosco used the money from that sale to buy 137 retail gasoline and convenience stores in Southeast urban areas in June 1999. Tosco plans to add the stores to its 76 and Circle-K retail chain. Tosco made another huge purchase in 2000, as it acquired the rights to 1,740 Exxon and Mobil stations in the Northeast and Mid-Atlantic. The agreement gives Tosco the right to use the Exxon and Mobil brands on these stations for the next ten years. As it expands its gas station holdings, Tosco sold a San Francisco oil refinery to competitor Ultramar Diamond Shamrock, while picking up a refinery in Roxana, Illinois from Equilon Enterprises.
Like many energy giants, Tosco also dabbles in chemicals and other materials. The company has announced plans to build a new polypropylene plant in Linden, NJ. The plant is expected to be completed in the year 2001 and will provide the company with the ability to create a wide range of film, fiber, and molded products. Tosco has also begun a mutual joint-venture with Union Carbide Corporation to produce and market polypropylene. This will enable both companies to increase the value and recogonition of their products.
Casting a cloud over Tosco's success is the death of four workers in a March 1999 refinery fire in California. Tosco agreed to pay $21 million to the families of the workers who died. Tosco is also being sued by a welder who says that unsafe working conditions led to crippling fire. In response to these accidents, Tosco has created a new corporate division - Safety, Health and the Environment.
