Shell narrows negotiations for Bakersfield Refinery

The on-again, off-again refinery in Bakersfield looks like it may have a new owner soon:

New York investment firm Kelso & Co. has emerged as the leading bidder for Shell Oil Co.'s Bakersfield refinery, people familiar with the situation said Thursday.

Kelso and others have been talking to Shell about buying the facility for several months, and Shell in the last week signed an agreement pledging to negotiate exclusively with the privately owned equity firm, the sources said.

It was unclear what price and terms were under discussion, though one person said Shell continued to insist on keeping ownership of a few assets — such as certain pipelines and a fuel-dispensing terminal — that are integral to operating the refinery.

The refinery generated a public outcry from Senator Barbara Boxer when Shell threatened to close it do to low profit-margins.