SAN ANTONIO--(BUSINESS WIRE)--June 1, 2004--Tesoro Petroleum Corporation (NYSE:TSO) announced today that it will call its 9% Senior Subordinated Notes due 2008. The notes will be redeemed on July 1, 2004 and will include a call premium of 3% plus accrued interest. The outstanding principal balance of the notes is currently $297.5 million.

The Company also announced that it has successfully amended its revolving credit facility to increase total capacity by $150 million to $650 million and extend the term by one year to June 2007. The amendment also gives Tesoro the ability to borrow, if necessary, up to $100 million on the revolving credit facility to prepay subordinated debt.

Tesoro Petroleum Corporation, a Fortune 500 Company, is an independent refiner and marketer of petroleum products. Tesoro operates six refineries in the western United States with a combined capacity of nearly 560,000 barrels per day. Tesoro's retail-marketing system includes approximately 550 branded retail stations, of which over 200 are company operated under the Tesoro(R) and Mirastar(R) brands.

This news release contains certain statements that are "forward-looking" statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements concern the company's intention to redeem its 9% Senior Subordinated Notes due 2008. Factors which can cause actual results to differ from these forward-looking statements include: changes in general economic conditions, the timing and extent of changes in demand for refined products, availability and cost of crude oil, other feedstocks or refined products, throughput and yield levels, disruptions due to equipment interruptions or failure at our or third-party facilities, and other factors beyond our control. For more information concerning these factors and other factors that could cause such a difference, see our annual report on Form 10-K and quarterly reports on Form 10-Q, filed with the Securities and Exchange Commission. We undertake no obligation to publicly release the result of any revisions to any such forward-looking statements that may be made to reflect events or circumstances that occur, or which we become aware of, after the date hereof.

    CONTACT: Tesoro Petroleum Corporation, San Antonio
             Investors:
             John Robertson, 210-283-2687
             or
             Media:
             Tara Ford, 210-283-2676

    SOURCE: Tesoro Petroleum Corporation