Valero
Valero Energy Corporation: Overview
Industry Areas
US-based Valero Energy is the world’s largest independent petroleum refiner. The company does not drill for oil, instead the majority of the its operations are focussed on the business of taking crude oil from various sources, processing it at its refineries to produce gasoline (petrol), diesel, jet fuel, asphalt, petrochemicals, and other products, then selling either on the market or directly to the consumer through its 6,800 retail outlets. Valero is also in the biofuel business, producing ethanol from ten plants in the US by fermenting corn starch with yeast.
Market share and importance
As of September 2012 Valero has a Global workforce of 22,000 employees and total assets of $42.8 billion (end of 2011). It owns 10 ethanol plants and owns 16 refineries with a combined refining capacity of 3 million barrels per day. Valero has plants and offices located in the US, Canada, the United Kingdom, Ireland and the Caribbean.[1]
History
Valero, who's name comes from Misión San Antonio de Valero, otherwise known as The Alamo, was created as a spinoff of Coastal States Gas Corporation on January 1st 1980. A corporate spinoff is where a section of a company is split off to form a separate business. At the time, Valero's creation was the largest corporate spinoff in US history.
The company's creation was the result of a $1.6 billion settlement, ending over six years of litigation brought against Coastal by municipal gas customers who claimed they had been overcharged for natural gas. LoVaca Gathering Co, a natural gas gathering subsidiary of Coastal, had failed to honour contracts to supply natural gas to utilities around Texas. As part of the settlement, Valero was created as a successor to LoVaca and separated from Coastal.
Valero started to diversify its gas transportation business when it bought a small oil refinery in Corpus Christi, Texas, in 1981. It began refining operations in 1984. Then, in 1997, Valero's refinery and retails divisions became a separate business, keeping the Valero name, whilst its natural gas divisions were acquired by the Pacific Gas and Electric Company.
Valero then acquired further refineries, including four in Texas and Louisiana in 1997, through its acquisition of Basis Petroleum, and another in 1998 in Paulsboro, New Jersey. In 2000 the company purchased ExxonMobil's Benicia refinery, along with interests in Californian Exxon branded service stations, and began retailing under the Valero brand.
Since then Valero has continued to take on more refineries, and expanded into the retail and wholesale market, including acquisitions of Ultramar Diamond Shamrock in 2001 and Premcor Inc. in 2005. It continues to operate under the Valero, Ultramar, Texaco, Diamond Shamrock, Shamrock and Beacon brands.
In 2009, Valero expanded to the ethanol business, purchasing seven ethanol plants from VeraSun Energy Corp, and forming a new subsidiary, Valero Renewable Fuels Company LLC, or Valero Renewables. The company also built a wind farm outside its McKee Refinery in 2009, which now has 33 turbines with maximum generating capacity of 50 megawatts.
More recently, in the summer of 2011, the company expanded to the Western European refining market with the acquisition of Pembroke Refinery in Wales, from Chevron. The refinery is one of the largest in Western Europe with a throughput capacity of 270,000 barrels per day. Valero also purchased various other maketing and logistics operations in the UK, including more than 1,000 Texaco branded garages.
Finally, in Autumn 2011, Valero purchased the 135,000 barrels per day Meraux Refinery outside New Orleans, along with related logistics.
Key Dates
1980: Valero Energy Corporation is formed as a spinoff of Coastal States Gas Corporation, specifically Coastal's intrastate Texas gas-gathering pipeline, based in San Antonio. Valero moves into refining by acquiring an interest in Saber Energy, Inc., which operates a small refinery in Corpus Christi, Texas.
1981: Valero begins a massive expansion of the Corpus Christi facility into a state-of-the-art refinery.
1984: The expanded Corpus Christi refinery is up and running.
1987: Valero spins off its natural gas pipeline and natural gas liquids business into Valero Natural Gas Partners, L.P., in which it holds a 49 percent share; company shuts down its exploration activities.
1994: Company buys the 51 percent of Valero Natural Gas Partners it does not already own.
1997: Valero divests its natural gas business in a deal with PG&E valued at $1.5 billion; company acquires Basis Petroleum, Inc. and its three Gulf Coast refineries.
1998: Refinery in Paulsboro, New Jersey, is purchased from Mobil Corporation.
2000: Valero buys a refinery in Benicia, California, from Exxon Mobil Corporation, along with 350 gasoline stations,marking the firm's entry into retailing.
2001: Ultramar Diamond Shamrock Corporation is acquired in a $6.1 billion deal.
2003: A refinery in St. Charles Parish, Louisiana, is purchased from Orion Refining Corporation.
2004: Valero acquires El Paso Corporation's Aruba refinery.
2005: Valero announces a definitive agreement to acquire Premcor Inc. for $6.9 billion in cash and stock.”
2009: Valero purchases seven ethanol plants from VeraSun Energy Corp.
2011: Valero acquires Pembroke refinery and associated logistics, in a $730 million deal with Chevron.
Sources: [2], [3]
References
[1]www.valero.com/OurBusiness/Pages/Home.aspx [2]www.fundinguniverse.com/company-histories/Valero-Energy-Corporation-Company-History.html [3]www.valero.com/OurBusiness/Pages/CompanyHistory.aspx