Draft:Tom O'Malley American Executive

Thomas D. O'Malley
Born	New York City
Citizenship	American
Alma mater	Manhattan College - 1963
Occupation(s)	Vice Chairman Phibro, CEO of TOSCO, CEO of Premcor, CEO of Petroplus, CEO and Founder of PBF Energy; Vice Chairman of the Board of ConocoPhillips, Board Director for Lowes and PetSmart
Years active	1966-2015
Employer(s)	Phibro Salomon, TOSCO
Known for	Refining Executive and Entrepreneur. Manhattan University's O’Malley School of Business carries his name.

Thomas D. O'Malley is a former trader who transformed the independent refining sector in America and Europe. He is described as an industry legend. He transformed TOSCO into the largest independent refining organization in the United States and a Fortune 100 Company (#72) over a period of 11 years. O'Malley also served as the CEO of Premcor, steering it through an IPO and eventual merger with Valero, the CEO of Petroplus, and was the founder and CEO of PBF Energy. He is known for his "Midas touch" in the oil industry.

During his 52 year career, O'Malley created five distinct multi-billion dollar oil companies - Hill/Basis Petroleum, TOSCO, Premcor, PetroPlus, and PBF Energy. He also took Circle K from being a regional petroleum marketer to become a global brand which is now a key part of the second largest convenience store operator in the world.

Early life

O'Malley was born to a middle class family as the son of a customs inspector and a nurse. and raised in New York City. O'Malley worked as a taxi and school bus driver to pay for his college education. His early career as a commodities trader laid the foundation for his future business acumen and strategy, focusing on cost management, operational efficiency, and strategic growth.

O'Malley was raised in New York City. "I did not grow up with a silver spoon in my mouth," he said. "I grew up with a stickball bat in my hand." He paid for college by driving a taxi on weekends and a school bus for a private school on weekdays. "I drove the rich kids for four years."

After college, a friend's uncle helped him get a job working in the mailroom of Philipp Brothers, a commodities-trading company. He soon moved into commodity trading and is reported to have dealt with "just about every commodity the company handled" (New York Times, December 1, 1988). After 10 years in the company's European operations, he was promoted to be the boss of the Phibro energy business. He described how all the crucial executive skills he learned came from his humble beginnings: "Do everything right. Make no mistakes. Pay attention to cost, cost, cost. Constantly review the commercial viability of something."

From Phibro to TOSCO

Phibro invested heavily into oil refining through its subsidiary Hill Petroleum Company, later named Phibro Energy and again changed to Basis Petroleum. Under O'Malley, the company purchase the Houston Refinery a small 67,000 bpd unit in the Houston Ship Channel (year needed), the central Louisiana Krotz Springs Refinery a medium complexity 75,000 bpd refinery, and the Texas City Refinery in 1986. These transactions were executed to give Phibro a position in the physical oil world from which it could originate trades (this was prior to the development of most financial markets in the oil trading world).

In 1981, Philipp Brothers facilitated a merger with the investment banking firm Salomon, after which Thomas D. O'Malley assumed the roles of Vice Chairman and Chief Executive of Salomon's oil trading division. He became the company's highest earner with wages in excess of $4.5 million per year.

In late 1985 and into 1986, O'Malley departed from Salomon and founded Argus Investment. The 1987 stock market crash created an opportunity for him and his Argus partners to acquire a 26 percent stake in Tosco Corporation for $88 million. TOSCO at that time was a major independent refining company on the West Coast that operated the Avon Refinery.

Following the retirement announcement of Tosco's chairman, O'Malley assumed the positions of Chairman and CEO of Tosco.

O'Malley was very deferential to his time at Phibro. In an interview in 1997, he credited part of his success to learning from legendary trader Ludwig Jesselson. O'Malley stated Jesselson "taught me to think big and always think about alternatives. He was the greatest player of all time.

Career as an independent refiner

TOSCO

From January 1990 to January 2001, Thomas D. O'Malley served as Chairman and CEO of Tosco Corporation. Under his leadership, Tosco experienced significant expansion, emerging as the largest independent oil refining and marketing company in the United States. By the year 2000, the company reported sales of $24.5 billion, surpassing competitors such as Ultramar Diamond Shamrock and Sunoco. At its peak, Tosco operated an extensive network of over 4,500 service stations and convenience stores across the United States under well-known brands including BP, 76, Exxon, and Mobil, in addition to 1.35 million bpd of refining capacity.

"He's tough, hard-nosed and has vision... He doesn't suffer fools easily." said Art Smith, head of JS Herold Consultants in an interview.

O'Malley implemented a strategic acquisition model that focused on acquiring refineries at costs significantly below their replacement value, improving operational efficiencies, reducing expenditures, and consistently achieving the highest return on capital among independent U.S. refineries. This approach not only enhanced Tosco's profitability but also reinforced O'Malley’s reputation as a decisive leader. His leadership style was particularly evident during Tosco's 1996 purchase of a refinery in Trainer, Pennsylvania. Following the transaction, employees at the Trainer refinery were dismissed, leading to allegations that O'Malley had exerted pressure on labor unions for concessions. Defending his position, he asserted that the facility had been unprofitable, stating, "The Trainer plant was losing money. Playing hardball is not going to make everybody happy, and sometimes you just have to"

In February 1999, an industrial accident at Tosco’s Avon, California, refinery resulted in the deaths of four workers and injuries to another. In the aftermath, Tosco faced legal consequences and paid $2 million in fines and donations. Uncharacteristically for a chief executive, O'Malley personally attended a public meeting near the refinery shortly after the incident, where he issued a formal apology and accepted responsibility. Reflecting on the experience, he remarked, "I went out there and apologized and accepted responsibility. It was the most difficult experience in my life and one that I absolutely will never forget" .

In early 2001, having established Tosco as the leading independent refinery in the United States, O'Malley oversaw the company’s sale to Phillips Petroleum for $7.36 billion. He subsequently assumed the role of Vice Chairman at Phillips. Under his leadership, Tosco not only became one of the most profitable trading firms in the oil industry but also gained widespread recognition from Wall Street investors, who viewed O'Malley’s strategic direction as instrumental to the company’s success.

TOSCO Transactions

Bayway

In December 1992, TOSCO agreed to buy the Bayway Refinery in Linden, New Jersey, from Exxon Company U.S.A. for $175 million At the time, Bayway was the second largest refinery on the U.S. East Coast (behind Sunoco Philadelphia), with a processing capacity of approximately 250,000 barrels per day. TOSCO closed the transaction in 4 months time. This acquisition significantly expanded Tosco's refining capabilities and was expected to double the company's annual revenues to $4 billion. Tosco planned to operate the refinery at higher production rates than Exxon had in recent years and intended to implement a capital modernization program to enhance the facility's efficiency and output.

Ferndale

In September 1993, Tosco Corporation agreed to acquire the Ferndale Refinery from BP Oil Company. The transaction, valued at approximately $175 million, encompassed the refinery located near Ferndale, Washington, along with 132 service stations in Washington and Oregon, two distribution terminals, and five undeveloped sites. ​

The Ferndale Refinery, established in 1954, had previously been operated by Mobil Oil until 1988, when BP took ownership. At the time of the acquisition, the refinery had a processing capacity of approximately 85,000 barrels per day. ​

As part of the agreement, Tosco committed to maintaining the BP brand for the acquired service stations in the region and secured the option to purchase Alaskan North Slope crude oil from BP to supply the refinery. Additionally, BP negotiated a provision to receive a share of the refinery's future profits over the subsequent five years, contingent upon market conditions, up to a cumulative total of $150 million. ​

This acquisition marked Tosco's expansion into the Pacific Northwest refining and marketing sector, complementing its existing operations, which included refineries in the San Francisco Bay area and Linden, New Jersey. ​

Trainer

In 1996, Tosco Corporation acquired the Trainer Refinery from BP Oil Company as part of its broader strategy to expand its refining and marketing operations in the United States. The Trainer Refinery, located in Trainer, Pennsylvania near Philadelphia, had a refining capacity of approximately 180,000 barrels per day and came with related terminal facilities, pipelines, and logistical infrastructure.

The deal was announced in August 1996, with Tosco agreeing to pay $225 million for the refinery and associated assets. At the time, BP was undergoing a restructuring effort and was divesting certain downstream assets. For Tosco, this acquisition significantly added to its presence in the East Coast refining market and enhanced its distribution capabilities in the Northeast. TOSCO invested $100 million into the restart of the plant.

Following these corporate changes, the Trainer Refinery was included in the sale to Phillips 66 in 2003, and later in 2012, it was acquired by Monroe Energy, a subsidiary of Delta Air Lines, marking a rare move by an airline into the refining sector.

Circle K

In February 1996, Tosco Corporation, a leading independent petroleum refiner and marketer, announced its agreement to acquire Circle K Corporation, a prominent convenience store chain, for approximately $710 million in cash and stock, along with the assumption of Circle K's existing debt, bringing the total transaction value to over $900 million.

At the time of the acquisition, Circle K operated nearly 2,000 outlets across 28 states, with most locations offering gasoline sales. This strategic move significantly expanded Tosco's retail footprint, complementing its existing network of approximately 130 convenience stores, which were subsequently rebranded under the Circle K name. ​

The integration of Circle K into Tosco's operations more than doubled Tosco's gasoline sales, positioning it as the nation's largest operator of company-owned convenience stores. This acquisition aligned with Tosco's objective of becoming a major gasoline retailer, enhancing its presence in the retail market and providing a stable outlet for its refined petroleum products.

Unocal - Los Angeles

In November 1996, Tosco Corporation agreed to acquire Unocal Corporation's West Coast refining and marketing operations, including the Union 76 brand, for approximately $1.4 billion in cash and $400 million in Tosco common stock, with potential profit-sharing payments of up to $250 million over seven years.

This acquisition encompassed three major refineries:

• Los Angeles Refinery: Located in Wilmington, California, with a capacity of 130,000 barrels per day.
• San Francisco Refinery: Situated in Rodeo, California, with a capacity of 77,000 barrels per day.​
• Santa Maria Refinery: Located in Arroyo Grande, California, with a capacity of 44,000 barrels per day.​

Additionally, Tosco acquired approximately 1,350 Union 76-branded service stations across California, Arizona, Nevada, Oregon, Washington, and Hawaii, of which 1,100 were company-controlled. The deal also included 13 storage terminals, three tankers, and 1,500 miles of crude oil and refined products pipelines. It further encompassed Unocal's lubricants, commercial, and industrial petroleum products businesses, along with its proprietary credit card system.

Alliance

In July 2000, Tosco Corporation announced its agreement to purchase the Alliance Refinery from BP Amoco for $660 million, with an additional approximately $200 million for hydrocarbon inventories. The transaction was completed on September 8, 2000. ​

The Alliance Refinery, located in Belle Chasse, Louisiana, is a complex facility with a refining capacity of approximately 250,000 barrels per day. It is equipped with units for crude and vacuum distillation, fluid catalytic cracking, delayed coking, catalytic reforming, HF alkylation, and hydrodesulfurization. This configuration enables the production of a high percentage of light refined products, primarily transportation fuels. ​

This acquisition marked Tosco's entry into the Gulf Coast refining market and positioned it as the largest independent refiner in the United States, with a total refining capacity of 1.35 million barrels per day.

Wood River

In June 2000, Tosco Corporation acquired the Wood River Refinery and Chemical Complex, located in Roxana, Illinois, from Equilon Enterprises LLC (Shell) for $420 million, with an additional $339.8 million allocated for inventories and transaction costs. This acquisition marked Tosco's strategic expansion into the U.S. Mid-Continent region, enhancing its refining capacity and market presence.​

The Wood River Refinery, established in 1917, is a complex facility with a refining capacity of approximately 295,000 barrels per day. Its advanced processing units, including catalytic cracking, hydrocracking, and hydrodesulfurization, enable the production of a broad range of petroleum products such as gasoline, diesel, jet fuel, asphalt, and chemical feedstocks. The refinery's strategic location near major pipeline systems and the Mississippi River provides access to diverse crude oil sources and facilitates efficient distribution of refined products across the Midwest.​

As part of the acquisition, Tosco entered into a 15-year product off-take agreement with an affiliate of Equilon, securing a substantial portion of the refinery's gasoline and diesel production. This arrangement ensured a stable market for the refinery's output and strengthened Tosco's supply chain in the region.

The sale of the Avon Refinery

In 2000, TOSCO agreed to sell its Avon refinery near San Francisco to Ultramar Diamond Shamrock (which soon after merged to became Valero) for approximately $800 million. The sale follows ongoing safety and environmental concerns after a fatal fire in 1999 that killed four workers. The Avon refinery, which processes 168,000 barrels of oil per day, has struggled to meet regulatory expectations. Tosco stated it will make a modest profit from the sale and plans to use the proceeds to reduce debt by $200 million and reinvest in higher-return projects. This marked a rare occurrence where Tom O'Malley sold a refinery.

The sale of TOSCO

In 2001, Tosco Corporation was acquired by Phillips Petroleum Company in a deal valued at approximately $7.49 billion in stock, with Phillips also assuming around $2 billion of Tosco’s debt.

Analysts had mixed reactions to the deal. Some questioned the timing, suggesting Phillips might be purchasing Tosco at the peak of the refining cycle. Fadel Gheit, an analyst with Fahnestock & Co., expressed concern that refining is less profitable than exploration and production, stating, "They would have been better off buying a pure natural gas explorer in the U.S." Interestingly, this is a position that heritage Conoco Inc. had taken around the same period when it purchased Gulf Canada. The move by Conoco actually weakened the company leading to its takeover by Phillips 66 the following year.

Conversely, other analysts viewed the acquisition positively. Fitch Ratings upgraded Phillips Petroleum following the acquisition, noting that Tosco's downstream operations provided balance to Phillips's existing upstream operations.

Overall, while some analysts questioned the timing and strategic fit of the acquisition, others recognized potential benefits in terms of operational balance and market positioning.

O'Malley stayed on at Phillips through its merger with Conoco to become the Vice Chairman of ConocoPhillips, the 12th largest American corporation in 2003.

Clark/Premcor

In 2002, Tom O’Malley resigned from his position at Phillips Petroleum and, within two weeks, assumed the roles of Chairman and Chief Executive Officer at Premcor, a privately held refining company headquartered in St. Louis. Upon his appointment, O’Malley promptly implemented a cost-efficient business model refined during his tenure at Tosco. In April of that year, he announced a restructuring initiative that involved the layoff of approximately one-third of Premcor’s 273 administrative employees in St. Louis and the relocation of its commercial division to executive offices in Greenwich, Connecticut. This restructuring underscored his strategic emphasis on operational efficiency and cost reduction.

Premcor, formerly known as Clark USA, had historically been a key player in the retail fuel market. By 1997, it was the seventh-largest direct operator of gasoline stations and convenience stores in the United States, with a network of 800 retail outlets spanning ten Midwestern states and generating annual revenues exceeding $4 billion. That same year, the Blackstone Group acquired a controlling 65 percent stake in Clark USA from the Trizec Hahn Corporation for approximately $135 million. Despite recognizing the value of the acquisition, Blackstone lacked the industry expertise necessary to navigate the complexities of the energy and oil markets. At the time, an industry analyst observed, “Although Blackstone made a timely investment, they lack the oil market trading savvy that it takes to maximize the return on these assets. With Mr. O’Malley on board, Wall Street will look for him to turn them into the next Tosco”

O’Malley faced considerable challenges in his new role. Unlike Tosco, which had developed a diversified asset base with refining and retail operations on both the East and West Coasts and a significant presence in Gulf Coast refining, Premcor lacked such geographic breadth. Moreover, the company was burdened with substantial debt, reporting $1.53 billion in long-term liabilities against total assets of $2.59 billion by the third quarter of 2001. Additionally, concerns arose regarding Premcor’s ability to secure sufficient capital to upgrade its refineries in compliance with U.S. environmental regulations. In 2000, the company rebranded itself as Premcor, an acronym for “premier corporation,” in an effort to reposition itself as an industry leader.

Despite these challenges, O’Malley’s reputation as a transformational leader strengthened Premcor’s prospects. At the time of his appointment, the company was preparing for an initial public offering (IPO), and his leadership instilled confidence among investors. Tom Kloza, publisher of Opis, an oil trade publication, commented, “He is to oil refining what Bill Parcells is to football coaching. He has [a lot of respect] on Wall Street with very good money connections. The union people might not like him because he cuts costs at refineries, but among investors, he’s the gold standard”

The IPO, launched in the spring of 2002, was highly successful. Premcor expanded its offering from 15 million to 18 million shares due to strong demand, pricing the stock at $24 per share—the upper limit of its projected range. The offering raised $432 million, representing 36.4 percent of the company’s 53.35 million outstanding shares. On May 3, 2002, Premcor’s stock closed at $27.80, securing a market capitalization exceeding $1.4 billion. "I think O’Malley had a lot to do with that. His name is carrying a lot of cachet.”

Following the IPO, industry analysts anticipated that O’Malley would pursue strategic acquisitions to expand Premcor’s market presence. In December 2002, the company acquired the Memphis refinery from the Williams Companies for $455 million. In January 2004, O’Malley oversaw the acquisition of a refinery in Delaware City from Shell-Saudi Motiva Enterprises for approximately $900 million. The Delaware City facility had underperformed under its previous ownership; however, O’Malley described it as “the most technologically complex refinery on the East Coast.” This acquisition increased Premcor’s refining capacity by 30 percent and provided significant access to the Northeast U.S. market. Confident in the refinery’s potential, O’Malley projected net earnings of $112 million for 2004, stating, “We’re confident in stating that this refinery acquisition will be immediately and significantly accretive to Premcor’s after-tax earnings per share and cash flow.”

Selling Premcor to Valero

In 2005, Premcor Inc., one of the largest independent oil refiners in the United States, was acquired by Valero Energy Corporation in a deal valued at approximately $8 billion. The transaction included both cash and stock, with Valero agreeing to pay $6.9 billion in cash and stock for Premcor’s outstanding shares and assuming about $1.3 billion in Premcor's debt.

At the time, the acquisition made Valero the largest U.S. oil refiner, boosting its refining capacity to over 3 million barrels per day across 18 refineries. Premcor brought with it a strong portfolio of complex refineries, including facilities in Memphis (TN), Port Arthur (TX), Lima (OH), and Delaware City (DE)—each capable of processing heavy, sour crude into higher-value clean fuels.

PetroPlus

O’Malley outlined his priorities, emphasizing operational profitability, capital restructuring, and expansion through refinery acquisitions. “The refining industry’s fundamentals are strong, and we intend to enhance Petroplus’s profitability while reshaping its capital structure. We will continue divesting non-core assets and reinvest proceeds into refining and wholesaling operations,” he stated.

As part of his commitment, O’Malley will acquire a significant ownership stake in Petroplus. He added, “With the combined expertise of our team and the existing Petroplus leadership, we aim to establish the company as Europe’s leading independent refiner and wholesaler.”

After successfully expanding his oil refining business in the United States, New Yorker Thomas O'Malley was confident in his ability to replicate that success in Europe as the leader of Petroplus. Petroplus Holdings AG, Blackstone Group, and First Reserve jointly launched a $1 billion US refinery acquisition program seeking other areas for growth.

By 2010, Petroplus had become Europe's largest independent oil refiner, accounting for six percent of the region’s fuel sales. O’Malley’s expansion strategy was facilitated by major oil companies offloading refineries. However, this expansion came at the cost of significant financial leverage, accumulating £1.5 billion in debt. A subsequent shift in market conditions proved detrimental. In the first nine months of 2011 when Petroplus reported losses of £263 million. The company then breached its debt covenants, prompting banks to withdraw financial support, ultimately leading to its collapse.

O’Malley’s strategy was predicated on the expectation that oil and gasoline prices would continue rising. Upon assuming leadership at Petroplus in 2006, he asserted that "Europe was ripe for consolidation" and expressed confidence that fuel prices would not decline over the coming decade. However, he appeared to have underestimated structural shifts in the market. According to consultancy firm Wood Mackenzie, 29 of Europe’s 96 refineries were either unprofitable or operating at a loss due to declining gasoline demand and shifting fuel preferences. Since 1990, gasoline consumption in Europe had steadily declined due to the dieselization of the vehicle fleet. This trend was furthered by the economic downturns across Europe. Refineries were limited in trying to meet evolving market demands.

However, the man dubbed the "godfather of refining" departed, Swiss-based Petroplus has entered administration, and four of its five refineries have faced at least temporary shutdowns.

PBF

Upon his return from Europe, O'Malley applied his established strategy once again. PBF Energy Partners, a partnership that includes the Blackstone Group, one of the world’s largest private equity firms; First Reserve Corp. based in Greenwich, and O'malley. In 2010, they reached an agreement to acquire the 190,000-barrel-per-day oil refinery in Delaware City, Delaware, for $170 million—a facility with which O'Malley knew well from prior ownership.

PBF continued to buy the Sunoco Toledo Refinery, ExxonMobil's former Paulsboro NJ Refinery, the ExxonMobil Chalmette Refinery in Louisiana, the ExxonMobil Torrance Refinery nearby Los Angeles, California, and the Shell Martinez Refinery in the San Francisco Bay Area.

Personal Life

O'Malley married Mary Alice Lucey and had four children.

O'Malley donated $25 million to his alma mater Manhattan College in 2015. He was formerly the chair of the Board of Trustees. The College named their business school in his honor and also the university's library. O'Malley had previously donated $10 million at an earlier point to the school as well.

O'Malley and his wife donated $1 million to the St. Peters Boys High School in Staten Island.

O'Malley owns an estate located on a private island in Greenwich CT. He also previously owned a superyacht - the Mary A which had won an award for the best superyacht of 2006 was sold for approximately $27.5 million.

References

Category:American business executives Category:Living people