Excellence Refined - 30 Years - Valero

On May 15, 2000, Valero
closed on the purchase of
ExxonMobil Corporation’s
prized refinery in the hills
of Benicia, California. The
acquisition not only ushered
Valero into the retail
market, it gave the company
unprecedented power – the
leverage it needed to enter the
“big leagues” of refining.
refinery would be sold to the company with the best bid,
not necessarily the highest bid. The refinery would go to
whichever company could promise the best future for the
refinery, its employees and community, and satisfy both
the Federal Trade Commission and the California Attorney
General’s Office. In letters, phone calls and face-to-face
visits, Valero committed to taking care of all aspects
of the operation. That was all Exxon needed to know.
It accepted Valero’s final bid at $895 million. “We are
pleased to have completed this agreement with Valero,”
Exxon senior vice president Gene Renna told the media in
May 2000. “Valero has a strong refining record, offered
comparable pay, benefits, and employment opportunities
to our employees, has a history of community involvement
and will be an effective retail marketer.” By summer, the
gold-and-green stacks of Benicia – painted to match the
rolling hills around it – were solidly part of the Valero
family. Its first retail brand, meanwhile, greeted consumers
with the look of a major brand store with the value of an
independent.
A Flagship Refinery Grows
In some ways, Valero’s $110 million acquisition of El
Paso Corporation’s Corpus Christi refinery and logistics
assets in 2001 took Valero back to its roots. The facilities
had been owned and operated for 40 years by the very
company from which Valero was born – Coastal – before
the infamous company and its assets were bought by El
Paso. The 115,000 BPD refinery, located just one mile
east of Valero’s first Corpus Christi refinery, was a semicomplex
plant capable of processing heavy, high-sulfur
crude oil – precisely Valero’s niche. The El Paso refinery
came to be known as Valero’s “East Plant,” and helped
create a 340,000 BPD refining complex on the shores
of the Corpus Christi ship channel. The new employees
there – like at other previously acquired facilities – soon
began to understand the impact of Valero’s ownership.
The acquisition also marked Valero’s entry into refined
product pipeline operations with El Paso’s three
intrastate pipelines and terminals, and allowed Valero to
ship its refined products from Corpus Christi to markets
in Houston, Victoria, San Antonio and the Rio Grande
Valley. Within one year of purchase, Valero’s investment
had paid out.
Strategy for Success
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