---

Tesoro Corporation has announced that it has signed an agreement with a wholly owned subsidiary of Houston-based Par Petroleum Corporation to sell all of its interest in Tesoro Hawaii, LLC, which operates the 94,000-barrel-per-day Kapolei refinery, retail stations and associated logistical assets. As part of the agreement, Par Petroleum intends to operate the assets as an integrated refining, logistics and retail system, Tesoro said.

The sale price of the Hawaii operation is $75 million, plus the market value of net working capital, which is expected to be approximately $225 million to $275 million.

Also included in the deal is an earn-out arrangement payable over three years up to $40 million based on consolidated gross margins.

Tesoro said it anticipates completing the sale in the third quarter 2013, subject to regulatory approval. Aegis Energy Advisors Corp. and Norton Rose Fulbright have acted as advisors to Tesoro during the transaction.

Commenting on the news, Greg Goff, President and CEO of Tesoro, said: "We are pleased to have reached this positive outcome for the Company," said Greg Goff, President and CEO. "While the Hawaii operations do not align with our strategic focus, we believe they offer a great opportunity for Par Petroleum."

Hawaii Network

Tesoro has been the leading supplier of transportation fuels in Hawaii and played a key role in the distribution of both marine and aviation fuels.

The Kapolei refinery can process up to 94,000 barrels per day of crude oil to make bunker fuel, jet fuel, asphalt, gasoline, diesel and fuel oil for electrical generation.

Tesoro Hawaii has acted as distributor of refined products statewide. On Oahu - the third largest of the Hawaiian Islands - pipelines from the Kapolei refinery feed terminals at Honolulu Harbor, Honolulu International Airport and military installations. Pipelines also deliver products to Kalaeloa Barbers Point Harbor, where they are transferred to ships and barges that supply the Neighbor Islands. Gasoline and diesel have been sold through a network of Tesoro-branded retail stations on Oahu, Maui and the Big Island, and through distributors.