Category Archives: Valero Energy Corporation

Listening in: Valero on recent earnings, then Q&A with investors

Repost from The Motley Fool
[Valero’s profits continue at massive levels, although not as high as in 2017 when the Republicans gave corporations unheard-of tax windfalls.  I have  highlighted  the only reference to west coast production.  Of special interest: search this long transcript for the 9 references to “exports” and the 18 references to “rail.”  – R.S.]

Valero Energy Corp (VLO) Q4 2018 Earnings Conference Call Transcript

VLO earnings call for the period ending December 28, 2018.
By Motley Fool Transcribers, Jan 31, 2019 at 4:36PM
Logo of jester cap with thought bubble.
IMAGE SOURCE: THE MOTLEY FOOL.

Valero Energy Corp  (NYSE:VLO)
Q4 2018 Earnings Conference Call
Jan. 31, 2019, 10:00 a.m. ET

Contents:
Prepared Remarks
Questions and Answers
Call Participants
Prepared Remarks:
Operator

Good day, ladies and gentlemen, and welcome to the Valero Energy Corporation’s Fourth Quarter 2018 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, there will be a question-and-answer session, and instructions will follow at that time. (Operator Instructions) As a reminder, this conference call is being recorded.

I would now like to turn the conference over to Homer Bhullar, Vice President of Investor Relations. Sir, you may begin.

Homer Bhullar — Vice President, Investor Relations

Good morning, and welcome to Valero Energy Corporation’s fourth quarter 2018 earnings conference call. With me today are Joe Gorder, our Chairman, President and Chief Executive Officer; Donna Titzman, our Executive Vice President and CFO; Lane Riggs, our Executive Vice President and COO; Jason Fraser, our Executive Vice President and General Counsel and several other members of Valero Senior Management team.

If you have not received the earnings release and would like a copy, you can find one on our website at valero.com. Also attached to the earnings release are tables that provide additional financial information on our business segments. If you have any questions after reviewing these tables, please feel free to contact our Investor Relations team after the call.

I would like to direct your attention to the forward-looking statement disclaimer contained in the press release. In summary, it says that statements in the press release and on this conference call that state the company’s or management’s expectations or predictions of the future are forward-looking statements intended to be covered by the Safe Harbor provisions under federal securities laws. There are many factors that could cause actual results to differ from our expectations, including those we’ve described in our filings with the SEC.

Now I’ll turn the call over to Joe for opening remarks.

Joseph W. Gorder — Chairman, President and Chief Executive Officer

Thanks, Homer, and good morning, everyone. We are pleased to report that we completed another good quarter where we ran our business well and delivered solid financial results. Throughout the quarter, we maintained our unrelenting focus on operations excellence, which enabled us to operate safely and reliably in an environmentally responsible manner.

We also delivered on our commitment to invest in growth projects and acquisitions that increase Valero’s earnings capability, while maintaining solid returns to our stockholders. In 2018, we matched our 2017 record for process safety performance, and we continued to outperform the industry on our personnel injury rates.

For logistics investments we made over the last several years are contributing significantly to earnings. Our investments in Line 9B, the Diamond Pipeline and the Sunrise Pipeline expansion increased our systems flexibility, allowing us to take advantage of the opportunities available in the fourth quarter of 2018. In fact, we set a record for total light crude runs at 1.5 million barrels per day and a record for North American light crudes process at over 1.3 million barrels per day.

We also continued to maximize product exports into higher netback markets in Latin America. Turning to capital allocation, we continued to execute according to our disciplined framework. Our projects in execution remain on track. Construction is scheduled to finish on the Houston alkylation unit in the second quarter and the Central Texas pipelines and terminals are expected to be completed in mid 2019. Continue reading Listening in: Valero on recent earnings, then Q&A with investors

Valero increased Canadian tar sands oil trains to and from Gulf Coast in 2018

Repost from S&P Global Platts
[Editor: You can be sure that if Benicia hadn’t succeeded in stopping Valero Crude By Rail in 2016, we would be seeing these monstrous oil trains every day now.  Many thanks to all who contributed to our David & Goliath effort!  NOTE: “USGC” in this story refers to the US Gulf Coast.  – R.S.]

Valero looks north to replace Venezuelan heavy crude

By Janet McGurty and Keiron Greenhalgh, 31 Jan 2019, 22:04 UTC

New York — Valero Energy increased the volume of heavy Canadian crude processed in its refining system in the fourth quarter of 2018, including crude arriving by rail, a trend that is likely to continue as recent sanctions cut into shipments from Venezuela.

Valero CEO Joe Gorder said the company needs to replace Venezuelan crude at two of its US Gulf Coast refineries – the 215,000 b/d St. Charles facility in eastern Louisiana and the 335,000 b/d Port Arthur, Texas, complex.

Valero’s systemwide heavy crude throughput was 445,000 b/d in Q4 out of 3.0 million b/d overall. About 20% of that was from Venezuela, Gorder said on the Q4 results call.

Valero imported about 50,000 b/d of heavy Canadian crude in October for its USGC system, compared with 126,000 b/d of Venezuelan crude, US Energy Information Administration data showed.

“We did 43,000 b/d of heavy Canadian by rail in Port Arthur [in Q4] and those were very discounted barrels,” said Gorder. Continue reading Valero increased Canadian tar sands oil trains to and from Gulf Coast in 2018

Benicia isn’t the only one – big oil money inserts itself in Petaluma & Santa Rosa races

Repost from the Santa Rosa Press Democrat
[Editor: note some of the same unfriendly giants as in Benicia: Valero Energy of course, and the law firm Nielsen Merksamer (“Bay Area-based law and lobbying firm that specializes in political and public-sector cases”).  – R.S.]

Oil and real estate interests pour money into Petaluma and Santa Rosa races

By Will Schmitt & Hannah Beausang, November 2, 2018, 8:57PM
Candidates for Petaluma Mayor include, from left, Mike Harris, Teresa Barrett, and Brian Powell.

More than $100,000 from oil and real estate interests has been funneled into city council races in Sonoma County’s two largest cities, highlighting how outside groups have ponied up to influence voters in the Nov. 6 election.

Of the pair of independent expenditure campaigns, the most visible has been in Petaluma, where a committee backed by several large oil companies has poured more than $78,000 into the race for mayor, according to campaign finance records.

The second spending effort is by a national real estate group that has spent more than $31,000 in favor of several city council candidates in Petaluma and Santa Rosa.

In Petaluma especially, the rush of outside spending has caused a stir. The two campaigns there have separately generated mailers supporting two mayoral candidates — Mike Harris and Brian Powell — and online ads and mailers supporting Harris and two others running for council seats, incumbent Dave King and candidate Michael Regan.

Brian Sobel, a Petaluma- based political analyst and former city councilman, called the level of outside spending in the city election unprecedented.

“It’s not been in Petaluma’s tradition or history to have independent expenditures committees singling out individual candidates and supporting them,” Sobel said.

Campaign finance rules limit individual donations directly to candidate campaigns to $200 in Petaluma and $500 in Santa Rosa per donor per election cycle. But there is no cap on how much money individuals or organizations can dole out through independent expenditure committees. The committees must report their spending to election authorities and are barred from coordinating with candidates.

Independent expenditures to sway elections are not new, though their prevalence and power has increased since the 2010 Citizens United case before the U.S. Supreme Court. It did away with independent political spending limits for corporations, labor groups and other entities on free-speech grounds.

The group responsible for the largest amount of spending in Petaluma this year goes by the name Coalition to Restore California’s Middle Class, Including Energy Companies who Produce Gas, Oil, Jobs and Pay Taxes. The committee has received millions of dollars from oil giants Chevron, Valero Energy and Phillips 66, according to campaign finance documents filed with the California Secretary of State.

The committee reported spending about $62,300 as of Friday to support Harris, a former councilman who is making his second bid for the mayor’s post. The oil-backed group also reported spending $15,800 in favor of Powell, a political newcomer and environmentalist who has embraced a strong anti-growth platform for the city.

Powell, Harris and Councilwoman Teresa Barrett are vying to replace Mayor David Glass, who is retiring.

The oil-backed coalition’s motives were not immediately obvious.

The phone number listed on the filings is associated with the San Rafael office of Nielsen Merksamer, a Bay Area-based law and lobbying firm that specializes in political and public-sector cases. Chevron Corp., Valero Energy and Philips 66 are listed as clients on the firm’s website.

Steven Lucas, the coalition’s registered agent, did not respond to requests for comment.

Barrett said she believed the outside spending was an attempt to bolster the chances of her rivals for the mayor’s post and deny her a public platform. Barrett is a strong pro-environment voice who serves on the Bay Area Air Quality Management District, which regulates regional refineries. The district’s leadership comprises local elected officials, and Barrett would have to step down if she came up short in the mayor’s race, she noted.

INSIDE THE TAX BILL’S $25 BILLION OIL COMPANY BONANZA

Repost from Pacific Standard
[Editor: Valero Energy’s windfall of DIRECT ONE-TIME 2017 TAX SAVINGS from the Trump tax law was $1.9 BILLION, according to Valero’s 4th quarter 2017 SEC filing .  See chart below. See also Valero’s Feb 2018 press release and Valero’s detailed SEC 2017 Year End Fiscal Report.  – RS]

A Pacific Standard analysis shows the oil and gas industry is among the tax bill’s greatest financial beneficiaries.

By Antonia Juhasz, Mar 27, 2018
President Donald Trump pitches his Tax Cuts and Jobs Act at the Andeavor oil refinery in North Dakota in September of 2017.
President Donald Trump pitches his Tax Cuts and Jobs Act at the Andeavor oil refinery in North Dakota on September 6th, 2017. (Photo: WhiteHouse.gov)

Last month, during a retreat in West Virginia, congressional Republicans set out their 2018 party goals. Their primary objective is to hold onto their majorities in the House of Representatives and the Senate, and the key mechanism for doing so is to ride the coattails of the Tax Cuts and Jobs Act. “The tax bill is part of a bigger theme that we’re going to call The Great American comeback,” said Representative Steve Stivers (R-Ohio), chairman of the National Republican Congressional Committee. “If we stay focused on selling the tax reform package, I think we’re going to hold the House and things are going to be OK for us.”

More than 50 percent of the tax bill’s benefits will go to the wealthiest 5 percent of Americans, and more than 25 percent to the wealthiest 1 percent, according to the Institute on Taxation and Economic Policy. As Businessweek put it, “President Donald Trump and Republicans sold their $1.5 trillion tax cut as a boon for workers, but it’s becoming clear just two months after the bill passed that the truly big winners will be corporations and their shareholders.”

Pacific Standard‘s original analysis finds that it is the oil and gas industry, including companies that backed the presidency of Trump and whose former executives and current boosters now populate it, that are among the tax bill’s largest and most long-lasting financial beneficiaries.

Just 17 American oil and gas companies reported a combined total of $25 billion in direct one-time benefits from the 2017 Tax Cuts and Jobs Act. Many of the companies will also receive millions of dollars in income tax refunds this year. Looking forward, the Tax Act then reduces all corporate annual tax bills by a minimum of 40 percent every year in perpetuity, while adding new benefits that function as government subsidies for the oil and gas industry. The companies’ activities in the United States are made less expensive, thereby encouraging a further expansion of oil and gas operations.

Pacific Standard reviewed the Annual 10K and Fourth Quarter Reports filed with the U.S. Securities and Exchange Commission for 2017 by 17 U.S. oil companies, looking at the largest companies in production, refining, and pipelines that also clearly specified the impacts of the Tax Act in their results. Private companies, such as Koch Industries, which undoubtedly benefit from the legislation, could not be included because they are not required to make these financial reports publicly available.

$25 BILLION IN OIL COMPANY TAX SAVINGS

Screen Shot 2018-03-25 at 6.19.30 PM
(Chart: Antonia Juhasz/Pacific Standard)  …CLICK TO ENLARGE

Continue reading INSIDE THE TAX BILL’S $25 BILLION OIL COMPANY BONANZA