Mergers and Acquisitions Allow Valero Energy to Become One of the Leading U.S. Petroleum Refiners

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Researched by Industrialinfo.com (Industrial Information Resources, Incorporated; Houston, Texas). Leading the recent trend of merger and acquisition activity in the U.S. petroleum refining industry is Valero Energy Corporation (NYSE:VLO) (San Antonio, Texas). Valero Energy has transformed itself from a regional supplier, to a national leader in the petroleum refining industry with a series of strategic acquisitions over the past seven years.

Prior to 1997, Valero Energy Corporation's refining operations were limited to one refinery in Corpus Christi, Texas (Plant 1001813). Starting in 1997, the company began an aggressive campaign to acquire refining assets and over the course of the next seven years has become one of the nation's top two leading petroleum refiners in terms of capacity.

Here's a recap of the company's recent acquisitions.

• In 1997, Valero acquired three refineries from Basic Petroleum Company in Houston, Texas (Plant 1014506), Texas City, Texas (Plant 1013243), and Krotz Springs, Louisiana (Plant 1000084).
  
  
• In 1998, Valero acquired a refinery in Paulsboro, New Jersey (Plant 1008919) from Mobil Oil Corporation.
  
  
• In May of 2000, Valero acquired a refinery in Benicia, California from Exxon Corporation.
  
  
• In June of 2001, Valero leased a refinery in Corpus Christi, Texas (Plant 1000163) from El Paso (formerly Coastal).
  
  
• Also in late 2001, the company acquired seven refineries from Ultramar Diamond Shamrock (UDS). Assets included refineries in Wilmington, California (Plant 1007691); Denver, Colorado (Plant 1523796); Saint-Romuald, Quebec (Plant 1019891); Golden Eagle, California; Ardmore, Oklahoma (Plant 1009088); McKee, Texas (Plant 1000910), and Three Rivers, Texas (Plant 1001021).
  
  
• In 2002, Valero sold the former Ultramar Diamond Shamrock (UDS) refinery in Golden Eagle, California to Tesoro as part of Federal Trade Commission (FTC) agreement.
  
  
• In March of 2003, Valero executed an option to purchase the formerly leased Corpus Christi, Texas refinery from El Paso.
  
  
• In July of 2003, acquired bankrupt Orion Refining in Norco, Louisiana (Plant 1013303).

This steady stream of refining acquisitions has led to the creation of one of the nation's top two petroleum refiners. Today, Valero Refining has total refining assets of 15 refineries with a combined capacity of 2.2 million barrels per day, second only to ConocoPhillips (NYSE:COP) (Houston, Texas), which has about 2.4 million barrels per day of capacity. For more information on ConocoPhillips see archived IIR Industry Alert: Like Oil on Water ConocoPhillips Rises to the Top of U.S. Petroleum Refiners for Capacity and Capital Spending.

As previously reported in an archived IIR Industry Alert: Valero Energy Now in Position to Become the Largest Independent Petroleum Refiner in the US, Valero Energy is also planning an aggressive capital spending program at its refineries to expand capacity and meet environmental low sulfur fuel mandates. The company currently has about $1.5 billion in planned future capital project on the books.