Chevron Hawaii to receive bids from prospective buyers this month, source says

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Duane Shimogawa

Reporter- Pacific Business News

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Chevron Corp., which announced in September that it is looking for a buyer for its Hawaii oil refinery in West Oahu, will receive a first round of bids from prospective buyers later this month, a source close to the situation tells PBN.

Al Chee, the Hawaii spokesman for Chevron (NYSE: CVX), told PBN Wednesday that the company won't have any comment until it has something to announce.

"Nothing to report at this time," he said.

The source, who asked not to be identified, said that the bids are non-binding, which means that no formal contract exists between Chevron and the prospective buyers.

Chevron has contracted Deutsche Bank to lead the process to determine the level of interest there might be for possible buyers for the refinery, the smaller of the two refineries in the state.

"We have asked them to make some inquiries in the industry," Chee previously told PBN. "We have not made any decisions to sell our operation in Hawaii."

A source previously told PBN that Chevron could fetch anywhere from $75 million to $300 million for its Hawaii operation, including its refinery and 60 gas stations.

But any possible buyer would have to fork over quite an investment to bring Chevron's Kapolei refinery, the smaller of the two oil refineries in Hawaii, up to par with environmental regulations, the source said.

"So whoever buys it, will have to invest in that at a cost of $200 million or $300 million," the source said. "There's a range of outcomes. Someone could buy the entire system."

Hawaii Independent Energy, the subsidiary of Houston-based Par Petroleum (NYSE: PARR), which bought Tesoro Hawaii's operation last year, including the largest oil refinery in the state, through a spokesman declined to say if it is interested in buying Chevron Hawaii.

"As you can understand, we are not in a position to comment on forward-looking initiatives that Par may or may not undertake," Hawaii Independent Energy spokesman Lance Tanaka previously told PBN in an email.

Duane Shimogawa covers energy, real estate and economic development for Pacific Business News.