Valero Energy

History

Valero was created on January 1, 1980, as the successor of Coastal States Gas Corporation's Subsidiary, LoVaca Gathering Company.[2] Valero took over the natural gas operations of the LoVaca Gathering Company, later renamed the Valero Transmission Company. The name Valero comes from Mission San Antonio de Valero, the original name of the Alamo.[2] Valero acquired Chorpus Christi Marine Services Company ("CCMS"), a small barge company in Corpus Christi, Texas in April 1981 when it purchased a stake in Saber Energy Inc. of Houston. In May 1985, Valero Refining and Marketing Company was born from Valero's subsidiary, Saber Energy, Inc.

In 1997, Valero Energy Company, "Energy," spun off its subsidiary, Valero, to its stockholders.[3] At the same time, the remaining divisions, which consisted of natural gas operations, merged with a wholly owned subsidiary of Pacific Gas and Electric Company.[3] In May of that year, the firm acquired Basis Petroleum, which left it with four refineries in Texas and Louisiana.[3] In 1998, it then acquired a Paulsboro, New Jersey, refinery, the company's first outside of the Gulf Coast area.[4]

In 2000, Valero purchased ExxonMobil's Benicia, California, refinery and interest in 350 Exxon-branded service stations in California.[2] The company also began retailing gasoline under the Valero brand. In June 2001, Valero acquired the Huntway Refining Company, along with two asphalt plants on the West Coast.[2][5]

On December 31, 2001, Valero completed its acquisition of Ultramar Diamond Shamrock.[5] The merger left Valero with around 4,500 Ultramar, Diamond Shamrock, Beacon, and Total retail sites in the United States, Canada.[5] With this acquisition, Valero also received ownership of Shamrock Logistics L.P., which was renamed Valero L.P. In 2006, the division was spun off as NuStar Energy.[5] Starting in 2002, Valero expanded its marketing to the East Coast, specifically the Northeast and Southwest, using the Valero brand.[6] The acquisition also includes all past Diamond Shamrock assets, including the former Sigmor Petroleum assets.[6]

On April 25, 2005, Valero agreed to buy Premcor, Inc.[7] Also in 2005, Valero announced that it was beginning a two-year process of converting Diamond Shamrock stations to the Valero brand.[7] In the next year, August 2008, Valero agreed to buy 70 Albertsons gas stations.[8]

Valero permanently closed its refinery on November 20, 2009, due to "financial losses caused by 'very poor economic conditions, significant capital spending requirements, and high operating costs'".[9]

Previous logos used by Valero. Top: original company logo from 1980. Below: Logo used until 2018.

On August 1, 2011, Valero announced that it had agreed to a major European purchase from Chevron Corp. Estimates on the value of the working capital would place the total price at $1.7 billion.[10] The acquisition included Chevron's Pembroke Refinery in Wales — one of Europe's largest and most complex — together with marketing and logistical assets throughout the United Kingdom and Ireland, which include 4 pipelines, 11 terminals, an aviation fuel business, about 1,000 retail outlets, inventory and other items.[10][11]

In 2013, Valero spun off its retail operations into a new publicly traded company, CST Brands.[2][12] In that same year, Valero created Valero Energy Partners LP, a partnership intended "to own, operate, develop and acquire crude oil and refined products pipelines, terminals and other transportation and logistics assets."[2]

A change to the logo, store canopy and facade was announced in April 2018. Known as "Vanguard", with various hues of blue, white, and yellow, Valero explained that applying the new design to all its stores would take several months to complete.[13]

Finances

A new design scheme gas station in 2020.

For the fiscal year 2019, Valero Energy reported earnings of US $2.784 billion, with an annual revenue of US $108.324 billion, an increase of 7.44% over the previous fiscal cycle.[1] Valero Energy's shares traded at over $91 per share[1], and its market capitalization was valued at over US $26.278 billion in June 2020.[14] Valero is ranked No. 32 on the Fortune 500 rankings of the largest United States corporations by total revenue as of 2020.[15]

Environmental record

The Political Economy Research Institute ranks Valero 28th among corporations that emit airborne pollutants in the United States. The ranking is a 2004 report based on both the quantity (3.36 million pounds in 2002) and the toxicity of the emissions.[16]

Valero contributed more than $4 million in support of the failed 2020 California Proposition 23.[17] Had it passed, Proposition 23 would've delayed the implementation of California's Global Warming Solutions Act of 2006 until the state attained an unemployment rate of 5.5% or less for a full year.[17] Critics argued that Proposition 23 would reduce incentives to finding alternatives to oil.[17]

Valero is the world's 2nd largest renewable diesel producer as the operator and 50% owner of Diamond Green Diesel.[18] Renewable diesel is produced "from discarded animal fats, used cooking oil, and inedible corn oil" and "meets the most stringent of emissions standards."[19] On top of producing renewable diesel, Valero also owns Sunray Wind, "a 50-megawatt wind farm that produces electricity for the McKee refinery in Sunray, Texas."[20]

Valero owns two oil refineries in California. The Benicia Refinery is located near the Carquinez Strait, a tributary of the San Francisco Bay.[21] The Wilmington Refinery is located 23 miles (37 km) south from downtown Los Angeles and was a past recipient of the YMCA Martin Luther King Human Dignity Award for community service and leadership.[22]

Both the Wilmington (CA) and Benicia (CA) refineries process domestic and foreign crude.[21][22] Benecia also processes crude from the Alaska North Slope.[21] In 2019, Wilmington and Benicia processed about 135,000 and 170,000 barrels of crude oil, inter-mediates, and other feedstocks, per day, respectively.[1]

Defense contracts

In 2017, Valero struck a new deal, worth $157 million, with the United States Defense Logistics Agency to provide fuel to Israel.[23] The deal was one year in length with a completion date of September 30, 2018.[23] This isn't Valero's first deal, though. Since fiscal year 2007, Valero "has worked on 461 contracts worth $9.03 billion in total obligations from the U.S. government..."[23]

Divestitures

During 2010, Valero sold its operations on the United States Atlantic coast.

In November 2009, Valero Energy closed its operations at Delaware City.[24] Later, Valero Energy reached an agreement to sell the assets of its Delaware City Refining and Delaware Pipeline to a Petroplus Holdings subsidiary, PBF Energy Partners LP, for approximately $220 million in September 2010.[25]

Shortly after the divestiture of Delaware City, the company sold its refinery at the Port of Paulsboro to PBF Holdings, a wholly owned subsidiary of PBF Energy, as well. The sale concluded Valero's refinery ownership on the East Coast.[25][26][27]

Acquisitions

Pembroke Refinery, Wales

Through acquisitions in 2011, Valero entered the European market while strengthening its position in the United States, by reducing costs in supplying the Atlantic coast.

On August 1, 2011, Valero acquired the Pembroke Refinery from Chevron, as well as the marketing and logistics assets, for $730 million, excluding working capital, which was valued at approximately $1 billion.[27] The Pembroke plant is one of the largest and most complex refineries in Western Europe with a total throughput capacity of 270,000 barrels (43,000 m³) per day and a Nelson complexity index rating of 11.8.[28] This puts Valero at a total of 15 refineries and 2.9 million barrels (460,000 m³) per day of throughput capacity overall, solidifying the company’s standing as the world’s largest independent refinery.[28]

Valero also purchased ownership interest in four major pipelines and eleven fuel terminals, a 14,000-barrel (2,200 m³)-per-day aviation fuel business, and a network of more than 1,000 Texaco-branded wholesale sites, which is the largest branded dealer network in the United Kingdom and the second-largest in Ireland. Valero has continued with the Texaco brand in these markets.[27]

Retail

This is the flagship Valero fueling station located at UTSA Blvd. and I-10 West in San Antonio, TX, prior to its 2018 re-branding to Circle K.
It is currently operated by Alimentation Couche-Tard, which owns the Circle K brand.

Valero Gas Station in Haltom City, Texas on Western Center Blvd. that opened in 1986 as Diamond Shamrock, fully converted to Valero in 2005.

Valero retails gasoline branded as Valero, Shamrock, Diamond Shamrock,[29] Ultramar, Beacon, and Total, the last under license from Total S.A.. While this arm of the company was the most visible to the public, it was, according to CEO Bill Greehey, "a very small part of [Valero's] operations".[30]

Valero attempted to shift its focus from being a discount gasoline brand to becoming a premium brand. As part of the shift, Valero began to rebrand its Ultramar, Beacon, Total, and Diamond Shamrock stations to the Valero brand. The Beacon and Shamrock brands are used by retailers as a low-cost alternative to the premium Valero brand. The Shamrock brand is based on the former Shamrock Oil and Gas Company, which merged with Diamond Alkali in 1967 to form Diamond Shamrock, thus declaring the trademark from official abandonment. The name Ultramar, while being eliminated in the United States, continued as Valero's brand name in Canada. Valero introduced its updated "Corner Store" retail concept on December 28, 2007, opening the company's first 5,500-square-foot (510 m²) prototype in western San Antonio. The Corner Store retail division, originally part of Diamond Shamrock, was absorbed into Valero's business portfolio in 2001. Not all Valero gas stations included a Corner Store - one Valero gas station in Euless, Texas east of Fort Worth is co-branded with a 7-Eleven convenience store.

See also

Wikimedia Commons has media related to Valero Energy Corporation.

• List of automotive fuel brands
• Valero Alamo Bowl
• Valero Texas Open

References

External links

• Official website

• Business data for Valero Energy:
  • Google Finance
  • Yahoo! Finance
  • SEC filings
• Valero Store Locator Map