Category Archives: Valero Energy Corporation

Brent crude oil, Ethanol, Light sweet crude, North American light crude oils, Rail industry, Valero Energy Corporation

Valero Energy reports second quarter 2014 results

Repost from Energy Global
[Editor: This article refers to “Brent crude oil.”   Wikipedia: “Brent Crude is a major trading classification of sweet light crude oil that serves as a major benchmark price for purchases of oil worldwide. Brent Crude is extracted from the North Sea, and comprises Brent Blend, Forties Blend, Oseberg and Ekofisk crudes (also known as the BFOE Quotation)….Brent is the leading global price benchmark for Atlantic basin crude oils. It is used to price two thirds of the world’s internationally traded crude oil supplies.”  – RS]

Valero Energy reports second quarter 2014 results

31/07/2014

Energy Global special reports

Valero Energy Corporation has reported financial results for the second quarter of 2014 (Q2). Net income from continuing operations attributable to Valero stockholders was US$ 651 million, US$ 1.22/share, compared to US$ 463 million, US$ 0.84/share, for the second quarter of last year.

Operating income for Q2 was approximately US$ 1.1 billion compared to US$ 805 million in the second quarter of 2013. The US$ 280 million increase in operating income was due primarily to higher refining throughput volumes and wider discounts relative to Brent crude oil for sour and certain North American light crude oils. These positive drivers were partially offset by weaker gasoline and distillate margins relative to Brent crude oil in most regions and higher natural gas costs in the second quarter of 2014 versus the second quarter of 2013.

Valero CEO and President Joe Gorder commented: “Valero delivered solid financial results for the quarter despite generally weaker product margins relative to Brent crude oil. We continued to execute our strategy to reduce feedstock costs by processing additional volumes of cost advantaged North American crude oil and investing in logistics assets to deliver those feedstocks to our refineries”.

Refining throughput volumes averaged 2.7 million bpd for Q2, an increase of 115 000 bpd from the second quarter of 2013. According to Valero, the increase in volumes was due primarily to less turnaround activity and higher utilisation rates spurred by the availability of discounted North American light crude oil on the US Gulf Coast.

“We increased North American crude oil consumption at our Quebec City refinery to 83% in the second quarter of 2014 from 8% in the second quarter of 2013, so we are progressing well toward our previously stated goal of reaching 100% by year-end. We also began processing Canadian bitumen through our new crude-by-rail unloading facility at our St Charles refinery”, Gorder said.

Ethanol operating income for Q2 was US$ 187 million compared to US$ 95 million in the second quarter of 2013. The US$ 92 million increase in operating income was mainly due to higher gross margin per gallon driven by lower corn costs as a result of abundant corn crop and lower industry ethanol inventories at the start of the quarter.

Gorder said: “Our ethanol investments have continued to be strong performers, delivering a total of US$ 430 million in operating income for the first half of 2014. We expect our eleventh ethanol plant, the Mount Vernon facility acquired in March of this year, to begin operating and contributing to the segment’s earnings in the third quarter”.

Capital expenditures for Q2 were US$ 806 million, of which US$ 240 million was for turnarounds and catalyst. Valero paid US$ 133 million in dividends on its common stock and US$ 228 million to purchase 4.0 million shares of its common stock. The company repaid US$ 200 million of debt that matured in April and ended the quarter with US$ 6.4 billion in total debt and US$ 3.5 billion of cash and temporary cash investments, of which US$ 382 million was held by Valero Energy Partners LP.

Valero expects 2014 capital expenditures, including turnaround and catalyst, to be US$ 3 billion, including approximately US$ 870 million allocated to logistics investments, most of which are expected to be eligible for drop-down into Valero Energy Partners LP in the future.

“Given the strong North American crude oil production growth, we continue to focus the majority of our strategic capital on light crude oil processing capability and logistics”, Gorder said. “We expect our refineries to benefit from access to lower cost crude oil and higher netback product export markets.”

Adapted from a press release by Emma McAleavey.
Oil Industry, Oil prices, Valero Energy Corporation

Global oil market: demand for road fuels has peaked and is now falling

Repost from The Economist
[Editor: An interesting European perspective on the future of world oil production and sales.  Note references to Valero near the end.  – RS]

A fuel’s errand

Making the most of a difficult business

| RUNCORN

THE sprawling acres of pipes, towers and tanks, which smash and rebuild hydrocarbon chains to turn crude oil into petrol, diesel and other useful stuff are vast and complicated. But the impressive scale of oil refineries is not matched by their profits. Refining in Britain is a miserable business these days.

In the 1960s big oil companies were so sure that demand for petrol would rise forever that they built the refineries to match. But demand for road fuels has peaked and is now falling—by 8% between 2007 and 2011. High fuel prices and stalling sales of vehicles that are anyway far more efficient are to blame. The result is wafer-thin margins and closures. Since 2009 two British refineries, at Coryton in Essex and in Teesside, have shut down. All but one of the remaining seven has been sold or been put up for sale in recent years.

Refineries operate in a global market. Petrol and diesel can be sent by tanker around the globe as readily as crude. Competing with sparkly, super-efficient new refineries in Asia and the Middle East is hard. Moreover, Britain’s older refineries were designed to produce petrol, which is increasingly the wrong fuel. Petrol sales by volume fell by 34% in the decade to 2011 while diesel grew by 73%. Around 40% of diesel is now imported. Nor do British refineries produce enough kerosene, which powers passenger jets, to supply the home market.

Big oil firms have sold up, preferring to invest in exploration and production. But why was anyone buying? For one thing, refineries are going cheap. Shell sold Stanlow to Essar Oil, an Indian firm, in 2011 for $350m (then £220m). In the same year Valero, an American refiner, bought Pembroke from Chevron for $730m.

The efforts to squeeze more returns from Stanlow show how refining can pay. Independent refiners like Essar and Valero are prepared to spend more time and money than big oil firms. Expertise and investment has put Stanlow, a 75m barrels-a-year refinery, well on the way in its plan to improve margins by $3 a barrel by 2014.

Essar aims to make Stanlow at least break even in bad times (in 2011 two-thirds of European refineries were losing money) and make decent profits when conditions improve. Generating energy using gas and tweaking technology to take crude from sources other than the North Sea, at better prices, is helping. Stanlow also has some natural advantages. It is the only refinery in the north-west and the closest to Liverpool, Manchester and Birmingham. Though refined fuel can be moved by pipeline, some 55% of the refinery’s output goes “off the rack”, loaded into road tankers to feed a big local market. More distant refineries, with higher transport costs, would have trouble competing.

But the market for fuel is still shrinking and tiny margins mean profits can be wiped out by small shifts in the price of crude or other costs. In the past five years Europe has lost 2.2m barrels a day (b/d) of refining capacity. Volker Schultz, Essar Oil’s boss in Britain, reckons that another 1m b/d needs to go. But that is not his only concern. Efforts in Britain to introduce a carbon floor-price will put its refineries at a disadvantage to European ones, and European environmental legislation will make the whole continent’s refineries even less competitive. It must seem to the industry as if it has a large hole in its tank and a small patch to fix it.

 

Valero Energy Corporation

Valero report: expected income is up, conference call on July 30

Repost from Valero.InvestorRoom.com

Valero Energy Corporation Provides Second Quarter 2014 Interim Update

Jul 14, 2014

SAN ANTONIO, July 14, 2014 /PRNewswire/ — Valero Energy Corporation (NYSE: VLO, “Valero”) announced today that the company expects to report income from continuing operations in the range of $1.10 to $1.25 per share for the second quarter of 2014.

Valero’s refining segment operating income is expected to be higher in the second quarter of 2014 versus the second quarter of 2013 primarily due to higher throughput volumes, as well as wider discounts on sour crude oil and certain types of North American light crude oil, which offset weaker year-over-year gasoline and distillate margins in most regions. In addition, Valero’s ethanol segment operating income is expected to be higher in the second quarter of 2014 versus the second quarter of 2013 mainly due to higher gross margins.

Valero also expects to report a loss from discontinued operations of $63 million, or $0.12 per share, related primarily to a noncash charge associated with recognizing an asset retirement obligation for the Aruba refinery.

As a reminder, Valero management will host a conference call on July 30, 2014 at 10:00 a.m. ET to discuss the quarterly earnings results, which will be released earlier that day, and provide an update on company operations.  Persons interested in listening to the presentation live via the internet may log on to Valero’s web site at www.valero.com.

About Valero
Valero Energy Corporation, through its subsidiaries, is an international manufacturer and marketer of transportation fuels, other petrochemical products and power. Valero subsidiaries employ approximately 10,000 people, and assets include 15 petroleum refineries with a combined throughput capacity of approximately 2.9 million barrels per day, 11 ethanol plants with a combined production capacity of 1.3 billion gallons per year, a 50-megawatt wind farm, and renewable diesel production from a joint venture. Through subsidiaries, Valero owns the general partner of Valero Energy Partners LP (NYSE: VLP), a midstream master limited partnership. Approximately 7,400 outlets carry the Valero, Diamond Shamrock, Shamrock and Beacon brands in the United States and the Caribbean; Ultramar in Canada; and Texaco in the United Kingdom and Ireland. Valero is a Fortune 500 company based in San Antonio. Please visit www.valero.com for more information.

Valero Contacts
Investors:
John Locke, Executive Director – Investor Relations, 210-345-3077
Karen Ngo, Manager – Investor Relations, 210-345-4574
Media:  Bill Day, Vice President – Media and Community Relations, 210-345-2928

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Safe-Harbor Statement
Statements contained in this release 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 of the Securities Act of 1933 and the Securities Exchange Act of 1934.  The words “believe,” “expect,” “should,” “estimates,” “intend,” and other similar expressions identify forward-looking statements.  It is important to note that actual results could differ materially from those projected in such forward-looking statements.  For more information concerning factors that could cause actual results to differ from those expressed or forecasted, see Valero’s annual reports on Form 10-K and quarterly reports on Form 10-Q, filed with the Securities and Exchange Commission and on Valero’s website at www.valero.com.

SOURCE Valero Energy Corporation
DEIR, Oil Industry, Valero Crude By Rail, Valero Energy Corporation

Investor journal takes notice: Valero DEIR cites significant & unavoidable increase in emissions

Repost from Market News Call
[Editor: Market News call is “a daily market news monitor providing insight, briefs earnings and market news.”  I find it interesting and somewhat encouraging that investors are highly interested in Valero’s Crude By Rail Draft EIR.  – RS]

Just In: Valero Energy Corporation (NYSE:VLO)

By Michael Aragon • June 25, 2014

Valero Energy Corporation(NYSE:VLO)’s plan to unload as many as 70,000 barrels of oil a day from trains at its Benicia refinery will increase emissions across California in a “significant and unavoidable” way, a city report shows.

Valero has applied to build a rail-offloading rack at the plant northeast of San Francisco that would take oil from as many as 100 tanker cars a day. The San Antonio-based company delayed the project’s completion by a year to early 2015 as it awaits approval from the city.

“Project-related trains would generate locomotive emissions in the Bay Area Basin, the Sacramento Basin, and other locations in North America,” the city of Benicia said in an environmental assessment posted on its website today. “The city has no jurisdiction to impose any emission controls on the tanker car locomotives; therefore, there is no feasible mitigation available to reduce this significant impact to a less-than-significant level.”

Valero is proposing the rail spur as record volumes of oil are extracted from North American shale formations that the U.S. West Coast has little pipeline access to. California’s refiners are already bringing in the biggest-ever volumes of oil by rail as they seek to displace shrinking supplies of crude within the state and from Alaska.

For safe and healthy communities…