Oil companies from Chevron Corp. to BP Plc are selling more refineries than at any time in history, even as a rebound in demand for gasoline and diesel pushes profits from running the plants to the highest level since 2007.
A glut of refineries put up for sale by integrated oil companies after the global recession dragged down profits are now available for 80 percent less than they fetched in 2006, Dahlman Rose & Co.'s Sam Margolin said.
Meanwhile, Tesoro Corp., the subject of more than a dozen takeover rumors since 2007, has the cheapest valuation among U.S. refiners, based on projected earnings before interest, taxes, depreciation and amortization, according to data compiled by Bloomberg.
Blackstone Group LP, billionaires David and Charles Koch, and energy producers from Brazil and Russia may be eyeing acquisitions of individual plants or company takeovers with refining margins almost tripling since Nov. 1, according to IHS Herold's John Parry. There are 2.5 million barrels of daily refining capacity for sale globally, he said -- enough to process the entire crude output of Nigeria or Norway.
"I've never seen this many refineries for sale," said Louis Gagliardi, managing director of energy at Hedgeye Risk Management in New Haven, Conn. Buyers will do well "if the plant has a supply source right in its backyard, or it's large enough to enjoy some economies of scale," he said.
As a Texaco Inc. executive in the 1990s, Gagliardi was part of a special-projects group that vetted all projects worth $10 million or more for the board of directors.
Holly Corp., which operates refineries from New Mexico to Oklahoma, agreed Tuesday to acquire Frontier Oil Corp. of Houston in a $2.9 billion all-stock deal to expand in markets west of the Mississippi River. Frontier's two refineries in Kansas and Wyoming will boost Dallas-based Holly's processing capacity by 58 percent.
A glut of refineries put up for sale by integrated oil companies after the global recession dragged down profits are now available for 80 percent less than they fetched in 2006, Dahlman Rose & Co.'s Sam Margolin said.
Meanwhile, Tesoro Corp., the subject of more than a dozen takeover rumors since 2007, has the cheapest valuation among U.S. refiners, based on projected earnings before interest, taxes, depreciation and amortization, according to data compiled by Bloomberg.
Blackstone Group LP, billionaires David and Charles Koch, and energy producers from Brazil and Russia may be eyeing acquisitions of individual plants or company takeovers with refining margins almost tripling since Nov. 1, according to IHS Herold's John Parry. There are 2.5 million barrels of daily refining capacity for sale globally, he said -- enough to process the entire crude output of Nigeria or Norway.
"I've never seen this many refineries for sale," said Louis Gagliardi, managing director of energy at Hedgeye Risk Management in New Haven, Conn. Buyers will do well "if the plant has a supply source right in its backyard, or it's large enough to enjoy some economies of scale," he said.
As a Texaco Inc. executive in the 1990s, Gagliardi was part of a special-projects group that vetted all projects worth $10 million or more for the board of directors.
Holly Corp., which operates refineries from New Mexico to Oklahoma, agreed Tuesday to acquire Frontier Oil Corp. of Houston in a $2.9 billion all-stock deal to expand in markets west of the Mississippi River. Frontier's two refineries in Kansas and Wyoming will boost Dallas-based Holly's processing capacity by 58 percent.
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