tesoro Code of Ethics

RIGHTdoing the

thing

CodeofBusiness

Conduct

Tesoro's

Dear Fellow Employee:

At Tesoro, we believe in doing the right thing, maintaining the highest standards of business conduct and ethics, and ensuring that our actions consistently reflect our Corporate Core Values:

• Honesty and Integrity • Respect and Trust • Commitment to Excellence • Creative and Entrepreneurial Spirit • Teamwork • Safety and Environmental Stewardship

Our values describe the personal characteristics we expect from our teams as they pursue our vision and strategic goals. These values encourage a culture of integrity and accountability that permits us to be a best practices employer, an honest and trustworthy business partner, and a good corporate citizen. This is how we create sustainable value for our shareholders.

We have developed a Code of Business Conduct to make certain everyone understands what is expected. The Code outlines the common values that guide our workplace actions and reflects the business practices and principles of behavior that support this commitment. We expect every employee, officer, and director to read and understand these standards and to follow them in their daily business activities. We also expect employees to contact the Business Conduct Office if they have any reason to believe that an action of Tesoro or its employees could violate our standards.

Thank you in advance for your compliance. Adherence to our Code is absolutely critical to Tesoro’s success.

Sincerely,

Bruce A. SmithChairman, President, and Chief Executive Officer

Way WeThe

Work

Tesoro at

WearepleasedtopresentourCodeofBusinessConductthatsummarizes

thestandardsthatgovernhowweconductourbusiness.ThisCode,ourpoliciesandprocedures,

andourworkrulesdescribehowweworkatTesoro.

Wewantourcompanytosucceedandhowweconductourbusinessishighlyimportantindefiningoursuccess.Theways

inwhichweconductourselvesarejustasimportantastheresultsthatweachieve.Thisiswhywehaveestablishedabusiness

conductandcomplianceprogram.Thisprogramhelpsdefineourcommitmenttolegalandethicalbusinessconduct.

Our Core ValuesOurcorevaluesguideourdecisionsanddescribethetypeofcompanyweare.Theyinspireustoexcel.Tesoro’scorevaluesarethefoundationforassuringwe“dotherightthing.”

• Honesty and Integrity • Respect and Trust • Commitment to Excellence • Creative and Entrepreneurial Spirit • Teamwork • Safety and Environmental Stewardship

Key MessagesHerearesomeofthemostimportantthingstoremember:

• Respect the dignity of everyone. • Listen openly to concerns and suggestions. • Carefully obey the laws and follow the policies

that govern how we conduct our business. • You don’t have to make tough decisions alone. • We will not compromise our values to meet

financial plans or goals.

Welcome doing the RIGHT thing

Using this Code . . . . . . . . . . . . . . . . . . . . . . . . . . 6 OurCodeofBusinessConductandEthics CodeofEthicsforCEOandSeniorFinancialOfficers DoingBusinessAroundtheWorld SpeakingUptoGetAnswers TalkingwithYourSupervisororManager TalkingwithHumanResources ContactingtheBusinessConductOffice MakingToughDecisions

A Culture of Compliance . . . . . . . . . . . . . . . . . . . 11 DutytoComply WhatOurProgramOffers CallingtheCodeofConductHelpline ProhibitionAgainstRetaliation ConductingInvestigations DisciplinaryAction

Working Together . . . . . . . . . . . . . . . . . . . . . . . . . 16 ConfidentialityandPrivacy DrugandAlcoholAbuse EqualityinEmployment Harassment WorkplaceViolence

Conducting Our Business . . . . . . . . . . . . . . . . . . 23 Antitrust,SalesPractices,andFairDealing BusinessRecordsandInternalControls ConflictsofInterest Fraud GeneralProcurement Gifts,Hospitality,andEntertainment InsiderInformation PoliticalContributions SensitivePayments

Protecting Resources . . . . . . . . . . . . . . . . . . . . . . 34 CompanyPropertyandTechnology Environment,Health,andSafety IntellectualProperty MediaandExternalContacts

Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40

Table of Contents

Using This Code

Our Code of Business Conduct and EthicsThis Code is a common-sense guide that you can use to make goodbusiness decisions. This Code applies to everyone at Tesoro. Each TesoroemployeeandBoardofDirectorsmemberisexpectedtoread,understand,andfollowourCode.

TheCodewillhelpyou:

• Resolvedifficultquestionsaboutconductonthejob.

• Applythepoliciesandlawsthatcontrolandguideourbusiness.

• Workwithyourfellowemployees,customers,businesspartners, competitors,regulators,vendors,andsuppliers.

• Bringtoourattentionsuspectedillegalorunethicalbehavior.

Weexpectoursuppliers, vendors,contractors,andbusinesspartners tobefamiliarwithourCodeandsupporteffectivecomplianceprogramswithintheirown organizations. Only the Compliance Officer and General Counsel canwaiveaprovisionofourCode.Ifrequiredbylaworregulation,wewillreportordisclosewaiversasappropriate.

This Code is a living document and it will change over time. However, thisCodeisnotanemploymentcontractbetweenyouandTesoro.

In addition to this Code, Tesoro has policies and procedures that describehowtoapplythe lawtoourbusinessoperations.Youareexpectedtoknowand follow the policies that apply to your work. All of Tesoro’s policies areavailabletoouremployees,onourintranetsite.Weofferon-linetrainingaboutourCodeandpolicies tohelpyouunderstand theseconcepts.ThecontentofourCodeisgovernedbyTesoro’spolicies.IntheeventthatthisCodeisinconflictwithTesoro’spolicies,thepolicieswillgovern.

Code of Ethics for CEO and Senior Financial OfficersTesoro’s Chief Executive Officer, Chief Financial Officer, and other financialprofessionals are expected to act ethically and promote honest businessconduct.Allprovisionsof thisCodeapply toourCEO,CFO,Controller,andpersons performing similar functions. We have adopted a complementarycodeofethicsfortheseindividualsthatfurtherhighlightstheirparticulardutiesandcommitments.

6 doing the RIGHT thing

Doing Business Around the WorldTesoro conducts its business in the U.S. as well as in other countries. Weare subject to the laws of the United States, as well as the laws of thecountrieswherewedobusiness.OurCodereflectsourcommitmenttoobeynot only the laws but also to respect the principles upon which these lawsarebased.

Thesheercomplexityof lawsandregulationscanmakeitdifficulttomakeagooddecision. Insomeinstances,theremaybeaconflictbetweenthelawsoftwoormorecountries.Ifyouhaveaquestionabouttherightcourseofactiontotake,contactourLegalDepartment.Justbecausethelawsarecomplicatedorhardtofollowdoesnotmeanthatweareexcusedfromcomplying.

Speaking Up to Get AnswersMostofushavefacedadifficultsituationwheretherightcourseofactionwashardtodetermine.Perhapsthefactswerecomplex.Perhapsa“good”choicewasjustnotobvious.Perhapsyourpersonalinterestswereinconsistentwiththe best interests of Tesoro. Maybe you did not have the information youneededtomakeaninformedchoice.

When you understand our expectations for legal and ethical conduct,you can handle most situations. You can act with confidence. However,this Code will not give you an answer for every situation. No code cando that. When you are unsure about the right course of action, discussthe situation with your supervisor. If that is uncomfortable or impractical,gethelp.

When you see or hear something that you believe is improper, contact oneoftheseresources.Whenyouspeakup,youhelptopreventmisconductandcorrect problems. We will not tolerate retaliation against anyone who needshelp,asksquestions,orreportsconcernsaboutworkplaceconduct.

Youhaveseveralavenuestogetadvice:

• Yoursupervisorormanager

• HumanResources

• CodeofConductHelplineat1-877-782-3763

• BusinessConductOffice

• ComplianceOfficerandGeneralCounsel

Talking with Your Supervisor or ManagerEvery supervisor and manager is expected to keep an “open door” andto provide timely advice on business conduct concerns. Though somesituations may be uncomfortable, we encourage you to talk at any timewithyoursupervisorormanagersothatagoodsolutioncanbereachedforeveryone. If you report unethical conduct or questionable accounting or

7Good Ethics is Good Business

auditingmatters toyoursupervisorormanager, theywillpromptlynotify theBusinessConductOfficeforassistanceinresolvingtheproblem.

Talking with Human Resources Many business issues involve human resources' policies and practices.ContactHumanResourcesifyourconcerninvolvesfairemploymentpractices,management practices, compensation, benefits, transfers, or promotions.If you choose to report unethical conduct to Human Resources, they willpromptly notify the Business Conduct Office for assistance in resolving theproblem.Remember:Whenindoubt,alwaysask.

Contacting the Business Conduct OfficeOurBusinessConductOfficeisacompany-wideresourcewhereyoucangethelp with business ethics and compliance. If you have a question, want toexpress a concern, or report a possible violation of law or our policies,contact the Business Conduct Office by e-mail at [email protected]. Often, this Office can provide you with immediate advice.If your issue requires additional attention, they will keep you informed ofprogresson yourquestion.Youcanalsocall theCodeofConductHelplineat1-877-782-3763.

Our Business Conduct Office reports directly to the Compliance Officerand General Counsel, who meets regularly with the Audit Committee ofthe Board of Directors. If you have concerns or complaints regardingquestionable accounting, auditing, internal controls, or other financialmatters,youareexpectedtoreportyourconcernsto theBusinessConductOfficeortheCodeofConductHelpline.

YoumayalsocontactourAuditCommitteeChairmandirectlybywritingto: Chairman The Audit Committee 300 Concord Plaza Drive San Antonio, Texas 78216-6999

To Learn More

Policy10.20.001,CodeofBusinessConductandEthics



Making Tough DecisionsTheanswerstosomeproblemsmaynotbeobvious.Inourwork,wefacesometoughdecisions.

Ifyouarehavingadifficulttimemakingadecision,tryansweringthesequestions:

• HaveIreviewedthefactscarefully?

• Whowillbeaffectedbymydecision?

• HaveIthoughtcarefullyaboutmyoptions?

• Whataretheconsequencesofmychoices?

• Willmydecisionstandthetestoftime?

• WillmydecisionreflectpositivelyonTesoroandonme?

• Isthistherightthingtodo?

Ifyouarestillnotsurewhattodo,speakup.Keepaskingquestionsuntilyouaresureyoucan“dotherightthing.”

When in Doubt,ALWAYS

Ask!

Obey

Lawthe

A Culture of Compliance


Duty to ComplyObeyingthelaw—bothitsspiritanditsletter—isthefoundationonwhichourstandardsarebuilt.Eachofusmustrespectandobeythelawsofthecities,states,andcountrieswhereweoperate.However,complyingwith the law isnotouronlyresponsibility.Weshouldconsidernotonlywhatthelawpermitsustodo,butalsowhatisthe“rightthingtodo.”

To Learn More

Policy10.20.010,ObeyingtheLaw

What Our Program OffersOurBusinessConductOfficesupportstheCodeofBusinessConduct.

ThisOfficeoffersmanyservices:

• DevelopingclearguidelinesaboutTesoro’sethicalandlegalstandards.

• Providingeducationandtraining.

• Respondingtoquestionsaboutbusinessconduct.

• EnsuringthatourCodeandpoliciesarecurrent.

• ManagingtheCodeofConductHelpline.

• Enforcingourpolicyprohibitingretaliation.

• Overseeingconfidentialinternalinvestigations.

• Monitoringandauditingtoimproveourcomplianceprograms.

Calling the Code of Conduct HelplineEach day you make choices that are critical to our success. Our Codeof Conduct Helpline is an important way for you to get answers toyour questions or report concerns. Our Helpline is available 24 hours aday, 7 days a week and may be contacted directly at 1-877-782-3763.An independent third party will take your call, listen, and ask questionsaboutyourconcern.Youwill receiveauniquenumberanddateso thatyoucanfollow-uponyourcall.Areportofyourcall ispromptlyforwardedtotheBusinessConductOfficeforaction.

AllcallstotheCodeofConductHelplineareconfidential.Ourgoalistoansweryourquestionsandtohandleissuesfairlyandconsistently.Wewillmakesurethat reports of improper conduct are thoroughly investigated. We will takeappropriateactiontoresolveeachreportedmatter.

Whenyoucontactus,youmayremainanonymous.Sometimes,itmaybecomenecessarytoknowyouridentity inordertoresolveyourconcern.Wewilltellyouwhenthatisthecase.

YoushouldcalltheCodeofConductHelplinewhen:

• Youhaveaquestionaboutethics,businessconduct,orcompliance.

• YouwanttoreportasuspectedviolationoftheCode,thelaw,oraTesoropolicy.

• Youhaveaconcernorinformationregardingquestionableaccountingorauditingmatters.

• Youtriedtoraiseaconcernbutdidnotreceivearesponse.

• Youareuncomfortablereportinganissuethroughotherchannels.

• Youbelievemanagementmaybeinvolvedorwillnotbeimpartial.

• Youdon’tknowwheretogotogettheinformationyouneed.

• Youwantadvicebeforeyouact.

Calls Helpline

Confidential to the

are


Prohibition Against RetaliationIt is Tesoro’s obligation to protect you from retaliation. When you stepforward to report something you believe is unethical or illegal, we willinvestigate and address the problem. Individuals who raise concerns ingood faith or who help to resolve reported matters are protectedagainst retaliation. Good faith does not mean that you are always right.Itdoesmeanthatyousincerelybelievethatyouaretellingthetruth.Anyonewhomisusesthisprogramwillbesubjecttodisciplinaryaction.

Conducting InvestigationsWe investigate reports about business conduct as promptly andconfidentially as possible. Our investigations are impartial, fair, andthorough. Who conducts an investigation depends on the issues involved.Sometimes the Business Conduct Office, Legal Department, InternalAudit, Corporate Security, or Human Resources may participate. We maycontact those who are involved in the situation, and provide them anopportunitytoexplainwhathappened.Weexpectyourfullcooperation.

Ifwefindthatourstandardshavebeenviolated,wewilltakeaction.Thismayinclude imposing disciplinary action, implementing system-wide changes, ornotifying the right government agency. Not only will we deal with a specificsituation, but we may also make changes so that the same problem doesnotrecur.

We cooperate fully with government investigations and are courteous togovernment officials. Notify the Legal Department immediately if you learnaboutaninvestigationorrequestforinformationfromanoutsideorganization.Donottrytorespondwithoutgettinglegaladvice.

Duringaninvestigation,neverdestroyoralterdocuments,lie,orobstructthecollectionofinformation.TheLegalDepartmentwillassistyouinrespondingtorequestsforinformationfromthegovernment.

Disciplinary ActionViolationsofthelaw,thisCode,orourpoliciescanhavesevereconsequences.Violationscanjeopardizeourrelationshipswithcustomersandsuppliers,andcould result in loss of our ability to do business. Anyone who violates thelaw, this Code, or our policies is subject to disciplinary action up to andincludingtermination.

Report Unethical

Illegal Activity

or


Working Together

Confidentiality and PrivacyIn Brief

Youmaycomeacrossconfidentialinformationaboutourcompany,employees,customers,orsuppliers.It iscriticalthatyoukeepallsensitiveinformationinconfidence. You should share confidential information only with those whohavealegitimateneedtoknow.

Key Points

Employee InformationEmployeeinformationisconfidentialandshouldonlybeusedforvalidbusinesspurposes and in compliance with applicable federal and state laws. Thisincludespersonnelfileinformation,medicalrecords,socialsecuritynumbers,homeaddresses,andtelephonenumbers.Wereservetherighttoinspectourproperty, including computers, telephone records, vehicles, lockers, e-mail,files, business documents, and workplaces. You should not expect privacywhenusingcompanyproperty.

Company InformationYoumayhaveaccesstoTesoro’sconfidentialorproprietaryinformationthatmustbeprotectedfromdisclosure.Examplesinclude:

• Businessstrategiesandplans.

• Projectedearnings.

• Forecastsaboutourfinancialcondition.

• Operatingmethodsandprocedures.

• Marketingstrategies.

• Possibleacquisitions.

• Informationaboutcurrentorprospectivebusinesspartners.

• Customerdata.

The duty to keep information in confidence continues even after you leaveTesoro.Talkwithyoursupervisor ifyouhavequestionsabouthowtohandleconfidentialinformationofanykind.

In Action

• Respectourcustomers’privateinformation.

• Don’tdiscussconfidentialinformationwhereotherscanoverhear.

• Neveruseconfidentialcompanyinformationforpersonalgain.

• NeverdiscloseconfidentialinformationofanykindwithoutfirstobtainingtheproperapprovalsfromyoursupervisorortheLegalDepartment.

To Learn More

Policy10.20.007,ConfidentialInformationPolicy10.20.011,ConflictsofInterest

Drug and Alcohol AbuseIn Brief

We expect our workplaces to be free from the effects of drug use andalcohol abuse. Illegal drug and alcohol use threatens our ability to serveour customers and compromises the safety and quality of our productsand services. We reserve the right to search personal property to enforceourrules.

Key Points

We expect your full concentration while on the job. You must be able toperform your job, free from the effects of prohibited drugs or alcohol.Our workplaces have specific procedures on drug and alcoholabuse in order to meet government requirements or collectivebargainingagreements.Youareexpectedtoknowandcomplywiththeserules.

Whileonthejob,oncompanyproperty,orincompanyvehicles,youmaynot:

• Possessorusealcohol.

• Use,sell,orpossessillegaldrugs,controlledsubstances,orprescriptiondrugscontrarytoyourdoctor’sorders.


Tesororeservestherighttotestemployeesfordruguseoralcoholabuse.Wemaychoosetotestanemployeefordruguseoralcoholabuserandomly,afteranaccident,orforcause.

In Action

Tomaintainthesafetyofourworkplace,youhavethefollowingresponsibilities:

• DonotuseorabusedrugsoralcoholwhenrepresentingTesoroorwhileworkingatanycompanylocation.

• RememberthatyourepresentTesorowhenyouattendbusiness-relatedmeetingsorsocialgatherings.Whileattending,actresponsibly.

To Learn More

Policy20.10.040Drug-FreeWorkplace

Equality in EmploymentIn Brief

Eachofus ispersonallyresponsibleformaintainingaworkenvironmentthatis free from discrimination. Tesoro respects the rights of others and offersequalemploymentopportunitiestoeveryonewhomeetsourqualifications.

Key Points

We are committed to fair practices in all aspects of employment.This includes recruiting, hiring, performance evaluation, training, discipline,work assignment, compensation, promotion, and termination. We followfederal and state labor and employment laws. We do not tolerate unlawfuldiscriminationofanykind.

Each of us has the right to be treated respectfully, without regard torace, color, religion, gender, national origin, age, disability, citizenship, orstatus as a veteran. Tesoro will make every reasonable effort toaccommodate employees’ religious observances. Tesoro will also makereasonable accommodations for qualified individuals who are disabled. Noemployee will be subject to retaliation for reporting an incident that theybelieve,ingoodfaith,violatesthispolicy.


In Action

• Eachofusisresponsibleforpromotingacourteous,respectful,andprofessionalworkenvironment.

• Treateveryonewithwhomyouworkfairlyandreasonably.

• Ifyouneedaworkplaceaccommodation,discussyourneedswithyoursupervisorandHumanResources.

• Speakupifyoufeelthatyouhavebeendiscriminatedagainstorifyouwitnessdiscriminationagainstothers.

• Ifyouareuncomfortablespeakingwithyoursupervisor,youmay contactHumanResourcesortheBusinessConductOffice.

To Learn More

Policy20.01.010,EqualEmploymentOpportunityPolicy20.10.050,Harassment

Harassment In Brief

Harassment is behavior that unreasonably disrupts another person in hisor her work because of that person’s race, color, religion, gender, nationalorigin, age, disability, citizenship, status as a veteran, or sexual orientation.Eachofushastherighttobefreefromimproperoroffensiveconductatwork.UnwelcomeorinsultingwordsoractionsthatcreateanoffensiveworkplacedonotbelongatTesoro.

You must follow all policies and work rules that eliminate workplaceharassment. Exercise good judgment in your relationships with co-workers.Eachofuswants tobevalued forwhoweareandwhatwecancontribute.Eachofuswantstoworkwherewearerespectedandappreciated.

Key Points

Sexualharassmentcanoccurundermanydifferentcircumstances.Ingeneral,itoccurswhen:

• Requestsfordates,sexualfavors,orothersimilarconductofasexualnatureserveasthebasisforemploymentdecisions.

• Anintimidating,offensive,orhostileworkenvironmentresultsfromsexualadvances,offensivejokes,orotherinsultingbehavior.

• Sexuallysuggestive,vulgar,orderogatorypictures,cartoons,drawings,ore-mailsarepresentintheworkplace.

In Action • Reviewyourdecisionstoensurethatmeritdrivesyour

actions—notbias.

• Neverthreatentogetevenwithsomeonewhorefusesarequestforadate.

• Becarefulaboutflirtingorstartingaworkplaceromance.Oncesomeonesays“no,”refrainfromanyfurtheradvances.

• Becarefulnottouseoffensiveorsexuallyexplicitlanguageintheworkplaceore-mails.

• Knowyouraudiencebeforetellingajoke.Whatisfunnytoyoumaybeoffensivetosomeoneelse.Makesureyourcommentsareappropriateforyouraudience.

To Learn More

Policy20.10.050,HarassmentPolicy20.01.010,EqualEmploymentOpportunity

Workplace ViolenceIn Brief

We provide a safe workplace for everyone. We will not tolerate workplaceviolence or threats of any kind — whether committed by or againstouremployees.

Weprohibithavingweaponsonourproperty,incompanyvehicles,orwhereverwe conduct business. We act promptly to investigate and reduce threats ofworkplaceviolence.Wereservetherighttosearchpersonalpropertytoenforceourstandards.

Key Points

Thefollowingbehaviorsareprohibited:

• Makingthreateningremarks.

• Causingphysicalinjurytosomeoneelse.

• Intentionallydamagingsomeoneelse’sproperty,oractingaggressivelyinawaythatcausessomeonetofearinjury.

• Spokenorwrittenwords,aswellasactions,areincludedinourdefinitionofthreateningbehavior.


In Action

Tomaintainthesafetyofourworkplace,youhavethefollowingresponsibilities:

• Treateveryonewithrespectanddignityatalltimes.

• Reportallthreateningbehaviortoyoursupervisor,HumanResources,CorporateSecurity,ortheCodeofConductHelpline.

To Learn More

Policy10.20.021,Antiviolence


Treat Everyone

Respect Dignity

with

and


Antitrust, Sales Practices, and Fair DealingIn Brief

We deal fairly with our customers, suppliers, competitors, and employees.Theytrustusbecausewedeliveronourpromises.Wearecommittedtofairandcompetitivesalespractices.Wedonotengageinpracticesthatunfairlylimittradeorexcludecompetitorsfromthemarketplace.

Antitrust laws prohibit agreements that eliminate or discourage competition.Wefollowtheselawscarefully.

Key Points

Healthy business competition is the basis for our system of free markets.We think our products and services speak for themselves. That’s why wecompetevigorously,ethically,andlegally.

We will not communicate formally or informally with competitors to fix orcontrolprices,allocatemarketshare,boycottcustomersorsuppliers,orlimitthesaleofourproducts.Wewillnottakeunfairadvantageofanyonethroughmanipulation,misrepresentation,oranyothertypeofunfairdealing.

Properly gathered business information is valuable. We gather informationabout our competitors only from public sources that are freely availabletoothers.

In Action

• Avoidevencasualconversationswithourcompetitorsregardingprices,products,markets,orservices.

• Aggressivecompetitionisnotanexcuseforintentionallymakingfalseormisleadingstatementsaboutourcompetitors.

• Neverrequireacustomertotakeanunwantedproductinordertoobtainaproductthatthecustomerdoeswanttobuy.

• Ifpeoplearediscussingtopicsyouthinkraiseantitrustconcerns,youshouldexcuseyourselffromtheconversationandleavetheroom.Then,immediatelycontacttheLegalDepartmentforadvice.

• Nevercommitanillegalorunethicalactinordertoobtaincompetitiveinformation.

Conducting Our Business

• Donotsetpricesbelowcosttodriveacompetitoroutof themarketplace.

• Be sure to read our Antitrust Compliance Manual and attendrequiredtrainingonantitrustlaws.

• Aboveallelse,useyourcommonsense.

To Learn More

Policy10.10.018,AntitrustCompliancePolicy10.20.017,GeneralSalesPracticesTesoroCorporationAntitrustComplianceManual

Business Records and Internal ControlsIn Brief

Our reputation for honest dealing is one of our most valuable assets. Byobservingthelaw,webuildourreputationasanhonestbusinesspartner.

We maintain accurate and complete records of all financial and businesstransactions. These records provide the basis upon which our financialstatements and other business information are compiled and disclosed.You must never record or omit information that intentionally hides or altersthetruth.

Youare responsible for followingoursystemof internalcontrols.Eachofusmustrecordtransactionsaccuratelyandcompletelyandfollowallaccountingpoliciesandprocedures.Nofalseormisleadingentriesshouldeverbemadeinourbooksandrecords.

Key Points

Generally Accepted Accounting PrinciplesWe keep all financial records in accordance with generally acceptedaccounting principles in the United States of America (U.S. GAAP). Oursystem of financial controls, checks, and balances helps ensure that weproperlyaccountforrevenues,expenses,assets,andliabilities.

Records ManagementWe have a records management system that determines what recordswe need to keep and for how long. It is your responsibility to know andfollowthespecificrulesforthebusinessrecordsinyourarea.

Records RequestsIf you receive a request for records from someone outside of Tesoro,contact the Legal Department. They will provide instructions on how torespond. Never destroy records that are related to ongoing litigation or anofficialinvestigation.


In Action

• Ourbooksandrecordsshouldbeaccurateandourdisclosurestransparent.

• Prepareallrecordsincludingexpensereports,timereports,andfinancialstatements—accurately,honestly,andpromptly.

• BringtotheattentionoftheBusinessConductOffice,ComplianceOfficerandGeneralCounsel,orChairmanoftheAuditCommitteeanyirregularityorinconsistencyinourrecordsandbooks.

• Neverwriteanythinginanelectronicformatthatyouwouldnotfeelcomfortablereadinginaformalwrittenmemo.

To Learn More

Policy10.40.010,RecordsManagementPolicy10.20.012,BusinessPractices

Conflicts of InterestIn Brief

Aconflictofinterestoccurswhenyourprivateinterestsinterfere—orappeartointerfere—withthebestinterestsofTesoro.Aconflictofinterestmayalsoarisewhenyourpersonal interestsadversely impactyourbusiness judgmentor job performance. We avoid conflicts of interest because they can causeseriousproblemsforyouanddamageourreputation.Weneedtoavoideventheappearanceofaconflictofinterest.

You should base business decisions on our company’s needs rather thanyourownpersonal interestsor the interestsofyour friendsor family.Unlessapproved by our Compliance Officer and General Counsel, you shouldnot pursue business with companies in which you, or members of yourimmediate family1 have a substantial financial interest2. In addition, neitheryou nor your immediate family should own a substantial financial interest inany organization doing business or competing with our company, unlessapprovedbyourComplianceOfficerandGeneralCounsel.

1 Your immediate family includes your spouse, children, stepchildren, parents,stepparents,brothers,sisters,grandparents, in-laws,andanyotherperson living inyoursamehousehold.

2 Asubstantialfinancialinterestisonepercentofanyclassoftheoutstandingsecuritiesofafirmorcorporation,or interestinapartnership, limitedliabilitycompanyorassociation.Asubstantial financial interestcanalsobefivepercentofyourtotaldirectandbeneficialassetsorincome.


Ifyouhaveanydoubtaboutwhetheraconflictofinterestexists,followthesethreesteps:

• Recognizethattheremaybeaconflictofinterest.

• Discloseandexplainthesituationtoyoursupervisor,theLegalDepartment,ortheBusinessConductOffice.

• Getadviceand,whencalledfor,removeyourselffromalldecision-makingaboutthesituation.

Key Points

Personal Business RelationshipsYou must disclose to the Compliance Officer and General Counselsignificant financial interests you have or your immediate family has in oursuppliers, customers, or competitors. Executive officers must disclose theirfinancial interests to the Compliance Officer and General Counsel and theChairman of the Board of Directors. Be careful that your personal businessrelationshipsneverinfluencethedecisionsyoumakeforTesoro.

Organizational Relationships If you or your immediate family serves as an officer, consultant, or boardmember of any company that transacts business with Tesoro, youmust disclose these obligations to the Compliance Officer and GeneralCounsel and get approval. When you disclose your organizationalrelationships, we can determine whether you are in a position to undulyinfluenceeither thedecisionsof theoutsideorganizationorTesoro.Wecanprovideadviceonhowtoresolvethesituationfairly.Business OpportunitiesBusiness opportunities are company assets. Tesoro will grow andprosper by cultivating customers and pursuing new leads. Do not takepersonal advantage of business opportunities you discover using Tesoro’sresources.TesoroemployeesshouldnotcompeteagainstTesoro.EachofusshouldadvanceTesoro’slegitimateinterestswheneverwecan.

In Action

• TalkwithyoursupervisorortheBusinessConductOfficeaboutany situationthatraisesarealorpossibleconflictofinterest.

• Usecompanyresources,assets,andopportunitiesonlyforTesoro’s businesspurposes.

• Disclosureandgettingadvicearethebeststepsyoucantaketo avoideventheappearanceofaconflictofinterest.

To Learn More

Policy10.20.011,ConflictsofInterestPolicy10.20.012,BusinessPractices


FraudIn Brief

Fraud can range from minor employee theft to significant misstatement ofour earnings and holdings. Material financial fraud can have an adverseeffect on our reputation and share price. Fraud is often accompanied bycollusionandstealth.

Key Points

Itiswrongto:

• Inaccuratelyrecordtimeforreportingpurposes.

• Falsifyquality,environmental,orsafetyreports.

• Processorsubmitfalseorinaccurateinvoices.

• Recordfalsesalesorexpensereports.

• Understateoroverstateknownliabilitiesandassets.

• Deferoracceleraterecordingoftransactionsinincorrectperiods.

• Alter,remove,ordestroycompanydocumentsexceptinaccordancewithourrecordsretentionpolicy.

• Usecompanypropertyforpersonalgainorbenefit.

To Learn More

Policy10.20.014,SensitivePaymentsandRelatedPracticesPolicy10.20.009,InsiderTradingPolicy10.20.012,BusinessPractices

General ProcurementIn Brief

We use vendors, suppliers, and contractors who best meet our needs. Ourvendors,suppliers,andcontractorssellusgoodsandservicesthatareessentialto our business. We protect from disclosure their confidential and proprietarydata.Wedon’trevealpricingorotherconfidentialinformationtothosewhoarecompetingforourbusiness.

Key Points

Wepurchasefromqualifiedsupplierswhosebidsarethemostresponsivetoourneeds. Selection decisions are based on objective information such as price,past performance, business reputation, engineering skill, production capacity,andfinancialstability.


We select vendors with care because their actions impact our reputation.Former employees who represent a vendor should be screened carefullyto prevent misuse of company information, creation of an unfairadvantage,ortheappearanceofaconflictofinterest.

If you have become a personal friend of a vendor over time, disclose thisrelationship before participating in the selection process. We can help youevaluatethesituationandavoidconflictsofinterest.

You cannot afford to let your good business judgment be clouded by agift provided by a vendor. Discounts or special offers must be offered toall Tesoro employees through a regular discount or buying program. Ifavendoroffersyouany itemofappreciation, talk itoverwithyourmanagerbeforeyouaccept.

In Action

• Makesurethatourvendors,suppliers,andconsultantsunderstandourexpectationsandtheirobligationstoperform.

• Wetreatoursuppliers,vendors,andconsultantsethicallyatalltimes.

To Learn More

Policy25.00.010,GeneralProcurementPolicy10.20.017,GeneralSalesPracticesPolicy10.20.011,ConflictsofInterestPolicy10.20.001,CodeofBusinessConductandEthicsPolicy25.00.015,SupplierDiversityPolicy25.00.016,SupplierRelations

Gifts, Hospitality, and EntertainmentIn Brief

A gift can be anything of value, including goods, services, favors, meals,trips, hospitality, and sports or entertainment tickets. Gift giving can bea part of conducting business. However, giving and accepting gifts may— or may appear to — compromise your independence and objectivity.This perception can damage your good name and our standing in thebusinesscommunity.

Wefollowtwoprimaryruleswhenitcomestogivingorreceivinggifts:

• Agift,favor,orentertainmentshouldnotbegivenoracceptedifitwillobligateorappeartoobligateTesorooryou.

• Nogiftshouldbeexchangedifitcouldjeopardizeourimageorreputation.


Youshould reviewTesoro’sGiftsPolicy (10.20.005)onour intranet site, andcomply with our policy limits on the value of gifts offered or received. Thispolicyestablishesapprovalrequirementsforgiftsofanykind.

Key Points

Giving GiftsWe compete solely on the merits of our products and services. You shouldnot give any gift if, under the circumstances, this raises questions aboutits propriety. We may provide gifts, meals, and entertainment of reasonablevalue in the course of doing business with commercial customers ornon-governmentpersonnel,provided thispracticedoesnotconflictwithourstandards or the standards of the recipient’s organization. Gifts of modestvalue can be given, for instance, to acknowledge good service, to motivateperformance,ortopromoteTesoro’sproductsandservices.

Giftsmaybegivenif:

• Thereisasoundbusinesspurpose.

• Theysupportourcorporatestrategy.

• Yoursupervisorauthorizesthem.

• Theyarewithinapprovedbudgets.

Receiving GiftsAskyourself ifagift thatyouareoffered looks likeanattempt toswayyourjudgment.Youshouldnotacceptagiftfromsomeonedoing—orwantingtodo—businesswithTesoro, ifthis isanattemptto improperly influenceyourdecisions.Generally,youmayreceiveinfrequentgiftsofmodestvalue.Youcanacceptpromotionalitems,suchaspens,notepads,orcoffeemugs.

Government RelationshipsMost government agencies do not allow their employees to accept evennominal gifts. Avoid giving any type of gift to federal, state, or localgovernmentemployees.

In Action

• Ifyouhaveanyquestionsaboutgivingorreceivinggifts,contacttheBusinessConductOfficeorourComplianceOfficerandGeneralCounselforadvice.

• Ensurethatmealsandentertainmenthavevalidbusinesspurposes.

• Itisneveracceptabletogiveorreceiveagiftofcash.

• Makesurethevendorsandsupplierswithwhomyoudobusinessarefamiliarwithourrulesongifts,hospitality,andentertainment.


To Learn More

Policy10.20.005,GiftsPolicy10.20.011,ConflictsofInterest

Insider Information

In Brief

You may learn of material inside information about our company orother companies with which we do business. It is illegal for you tobuy or sell securities of any company while possessing material insideinformationabout that companyor topass that informationon to someoneelse who then buys or sells securities of that company. This is calledinsidertrading.

Key Points

Material inside information is non-public information that is significantenough to affect the value of a company’s stock, or to influence someoneto buy or sell stock. Examples of material inside information includesignificant contracts, financial forecasts or earnings estimates,major management changes, proposed mergers or acquisitions, majorlitigation, or securities offerings. All non-public information about Tesoroshould be considered confidential. Public information is the kind ofinformation that is generally available in a press release, a majornewspaper,oranSECfiling.

In Action

• DonotbuyorsellsecuritiesofTesorooranyothercompanybasedonnon-publicinformation.

• Donotpassinsideinformationtosomeonewhohasnoneedtoknow.

• KeepinconfidenceanymaterialinsideinformationyoulearnaboutTesorooranyothercompany.

• Neverbuy,sell,ortradeinoptions,puts,calls,orsimilartypesofspeculativeinstrumentsortakeshortpositionsinTesoro’ssecurities.

• GetlegaladviceifyouarenotcertainwhetheritisOKtobuysecuritiesorsellsecuritiesthatyouown.

To Learn More

Policy10.20.009,InsiderTradingPolicy10.10.008,SelectiveDisclosurewithInvestmentCommunityPolicy10.20.011,ConflictsofInterest

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Political ContributionsIn Brief

We comply with all laws regulating our company’s participation in politicalaffairs, including contributions to political parties, committees, or individualcandidates. Any political contribution made by Tesoro will be made only incompliancewiththelaw.

Key Points

Tesoro maintains state and federal Political Action Committees (PACs).The head of Governmental Affairs must approve all political contributionsin advance — whether through the use of a Tesoro PAC or throughcorporatefunds.

We encourage everyone to be an informed voter and to get involved in thepolitical process. Your participation is entirely voluntary. If you choose toparticipate,yourcontributionsmustbeonapersonalbasis,usingyourowntime and funds. Tesoro will not reimburse you for any contributions thatyoumake.

In Action

• Donotuseworktime,money,orresourcestopromoteapoliticalcampaignorcandidate.

• NeverloanorusecompanypropertyforpoliticalpurposesthatarenotauthorizedinadvancebyTesoro.

• BecarefultoavoidgivingtheimpressionthatyouarespeakingonbehalfofTesorowhenyouparticipateasacitizeninthepoliticalprocess.

To Learn More

Policy10.20.025,PoliticalActivityPolicy10.20.011,ConflictsofInterest

Sensitive PaymentsIn Brief

We believe customers should choose our products and services becauseof their intrinsic value, not because they received something extra from us.You must never offer anything of value to obtain an improper advantagewhen conducting Tesoro’s business. We prohibit kickbacks, bribes, andpayoffs. This includes the giving or accepting of money, fees, gifts, favors,or anything of value provided directly or indirectly in return for morefavorabletreatment.


Key Points

It is just as wrong to offer a kickback as it is to accept a bribe. Neveraccept anything from a vendor or supplier in exchange for favorablyconsideringtheirproduct.Remember,yourgoodjudgmentisnotforsale.

All countries prohibit bribery of their public officials. Many countries,including the United States, also prohibit bribery of officials of othercountries. Generally, these laws prohibit giving anything of value toforeign officials or their family members for the purpose of obtainingbusiness. At Tesoro, our policy extends beyond these laws. Youmay not make an unauthorized payment, concession, or bribe togovernment officials or employees or to private parties engaged in acommercialtransaction.

In limited circumstances in some countries outside of the United States,you may need to pay a government official to obtain a benefit to whichTesoro is entitled under local law. These facilitating payments must bemodestinamountandnecessarytoachieveavalidbusinesspurpose.Nevermake a facilitating payment without first consulting the Legal Department.If you must make a facilitating payment, be sure to record and account foritproperly.

In Action

• Don’tmakepaymentsorgivegiftsthatareintendedtoincreasethevolumeofbusinessthatcustomersdowithTesoro.

• Neverhideapaymentorfalsifybusinessrecords.

• Inappropriateorquestionablepaymentsmadethroughanintermediaryarejustasunacceptableasthosethataremadedirectly.

• Neverestablishanysecret,“offthebooks,”orunrecordedfunds,assets,ortransactions.

• AgentswhorepresentTesorooutsideoftheUnitedStatesmustcomplywithourCodeofBusinessConduct.

To Learn More

Policy10.20.014,SensitivePaymentsandRelatedPractices

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Prepare Records

• timely• honestly• accurately


Protecting Resources

Company Property and TechnologyIn Brief

You are entrusted with company property in order to do your job. Each ofus is responsible for safeguarding Tesoro’s funds, records, tools, vehicles,equipment, supplies, and property. We are responsible for using companypropertyandtechnologyefficiently.

Key Points

All of our assets, including our technology and communications systems,should be used for legitimate business purposes. Tesoro has the right tomonitor and review the information contained in these systems. Withinreasonablelimits,youmayusecompanytelephonesorotherresourcessuchas e-mail, instant messaging, Internet, voice mail, faxes, and computers forlimitedpersonalcommunication.

YouareencouragedtousetheInternettohelpyoudoyourjob.However,theInternet—justlikethetelephoneandothercompanyproperty—shouldnotbeusedtosupportapersonalbusinessorpoliticalventure.

Weprotectourcomputersystemsfromunauthorizedaccessbyoutsiders.Thisisonewaytosafeguardourconfidentialandproprietaryinformation.

In Action

• Preserveourassets,takecaretopreventtheft,loss,ordamagetoourproperty.

• Softwareprogramsmaynotbecopiedforotherkindsofbusinessorhomeuse,orsharedwithothers.

• YoushouldnotexpectprivacywhenusingTesoro’sequipmentortechnology.

• DonotpluginpersonalcomputingdevicestotheTesoronetwork.

• Safeguardyourpasswordsandfollowalldirectionsaboutcomputersecurity.

• Protectinformationfromimproperalteration.

• Useonlyproperlylicensedsoftware.Followthetermsofourlicenses.

Somecontentisneveracceptabletobesentorreceivedonourcommunicationsresources:

• Sexuallyexplicitmessages,cartoons,images,orjokes.

• Profanityorobscenity.

• Intimidating,offensive,orhostilematerialbasedonsex,age,race,religion,nationalorigin,disability,orotherprotectedlegalstatus.

• Personalopinionsmasqueradingascompanyopinionsorcommitments.

To Learn More

Policy21.60.040,InformationTechnology:AcceptableUsePolicy24.00.020,LossofCompanyProperty

Environment, Health, and SafetyIn Brief

Ourgoalistoprotectourenvironmentfromharm.Eachofusisresponsibleforminimizingadverseenvironmentalimpact,reducingwasteandemissions,andpromotingconservation.

We believe that all accidents and workplace illnesses can be prevented.Accident prevention is good business. We expect everyone to work safelyandthinksafety.Weexpectsupervisorsandmanagerstopreventaccidents.Wenevercompromisesafety.Oursafetystandardsarepostedinallcompanylocationsandfacilitiesasremindersofourfundamentalcommitments.

Key Points

All our facilities must operate with the necessary permits, approvals, andcontrols that protect the environment. We take special care to ensurethat we do not discharge hazardous substances beyond those allowedin our permits and approvals and we strive to reduce all emissions fromour facilities. Each of us is responsible for reporting safety hazards,accidents, and incidents — no matter how minor. We act promptly toinvestigate situations that create workplace hazards. We take immediatecorrectiveactiontoeliminateunsafepracticesandpreventinjuries.

Protect

Environment our

Youareon the front line toensure thatouroperationsareconductedsafely.Ifyouidentifyaconditionthatwarrantsinvestigation,bepreparedtoprovidedetailstoyoursupervisorabout:

• Thenatureoftheproblem.

• Thelocationoftheproblem.

• Whentheproblemoccurred(dateandtime).

• Nameandquantityofmaterialsinvolved,totheextentknown.

• Theextentofinjuries,ifknown,andanyadditionalinformationyoumayhave—particularlyeyewitnessinformation,documents,orphotographs.

In Action

Youhavethefollowingresponsibilities:

• Followallsafetypoliciesandprocedurescarefully.

• Useprotectiveequipmentandpersonalgearthatisappropriateforthetaskathand.

• Operatevehiclesandmarinevesselsproperly.

• Alwaysbepreparedforfireprotection.

• Becomefamiliarwiththelaws,regulations,policies,andproceduresthatapplytoyourownjobduties.

• Properlyandsafelydisposeofhazardousmaterials.

To Learn More

Policy23.10.010,SafetyandHealthObjectives

Intellectual PropertyIn Brief

Our intellectual property is extremely valuable. It includes trademarks,copyrights,patents,tradesecrets,technicalandbusinessknowledge,know-how,andexperience.

Each of us is responsible for protecting Tesoro’s intellectual property andreporting infringements. We do not disclose business ideas, projects, orplans to anyone who does not have a legitimate need to know. Anyinvention or improvement conceived or discovered during the courseof your employment belongs to Tesoro, and must be disclosed to theLegalDepartment.


Key Points

Intellectualpropertycoversawiderangeof informationandknowledge. It isvaluable,inpartbecauseitincludesfacts,data,andknowledgethathavenotbeendisclosedtothepublic.

Herearesomeexamplesofourintellectualproperty:

• Marketresearchdataandresults.

• Engineeringprocessesandtechniques.

• Technicaldrawingsandplans.

• Customerandsupplierlists.

• Businessanalysis.

• Marketingstrategies.

• Pricingrecords.

• Plantlayouts,engineeringdesigns,andblueprints.

Other companies also protect their confidential and proprietary information.We respect their rights. We do not tolerate the unauthorized copying ordisclosure of another’s intellectual property. You may use other people’sinformation only if you have received their written consent or if theinformationispubliclyavailablewithoutrestriction.

In Action

• SpeaktotheLegalDepartmentifyouhavequestionsaboutaninventionordiscovery.

• Followourcopyrightlicensingagreements.

• Generally,youcanmakeareasonablenumberofphotocopiesofselectedcopyrightedmaterialsforinternaluse.

To Learn More

Policy10.20.008,InventionsandImprovementsPolicy21.60.040,InformationTechnology:AcceptableUse

Media and External ContactsIn Brief

We receive questions daily from external contacts about our business. TheCorporate Communications Department or designated media spokespersonshall handle calls from the media and the investment community. Theydetermine whether and when interviews are appropriate. Channeling allcalls through the Corporate Communications Department ensures that we


conveyaconsistentmessage.Theyensure thatwedonotdisclosematerialinformationselectively.Theycontrolhowinformationisreleasedtothepublicsothatthisisdonecorrectly.

We are very careful not to release material, non-public information. Thisincludesinformationaboutearnings,oursecurities,pendingmergersorothertransactions,changesinmanagement,newproducts,anddiscoveries.

In Action

• Assumethatalldiscussionswithamemberofthemediaare“ontherecord.”

• Don’ttrytoansweramediaquestionyourself,evenifyouthinkyouknowtheanswer.

• AllinformationaboutTesoroanditsprojects,includingthoseinvolvingothercompanies,mustbereviewedpriortorelease.

• Ifyoutalktothemediaaboutyouroutsideinterests,makeitclearthatanyopinionyougiveisyourown,andnotthatofTesoro.

To Learn More

Policy10.30.010,DesignatedSpokespersonsandMediaCommunicationsPolicy10.10.008,SelectiveDisclosurewithInvestmentCommunityPolicy10.30.030,TrackingCommunicationfromExternalParties


RIGHTdoing the

thing

CodeofBusiness

Conduct

Tesoro's

BusinessConductOfficeTesoroCorporation®

SanAntonio,Texasrev2007

tesoro Code of Ethics

Economy & Finance

Transcript of tesoro Code of Ethics