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Valero to sell assets?

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This topic contains 5 replies, has 2 voices, and was last updated by  Anonymous 13 years, 11 months ago.

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  • #3876

    Anonymous

    Word in the grapvine today says that Valero is planning to sell a number of U.S. facilities and the Refinery in Aruba.  If this is indeed true, makes you wonder why Valero went through all the cost and time to make these purchases just a few years ago.  Has anyone else heard about this potential “unloading” of facilities?  Will be interresting to see which Refiners vie in to take over what is put out on the table.

  • #7174

    Anonymous

    Word is they are looking to buy Hovensa.

  • #7172

    Anonymous

    WOW – HOVENSA would be a huge asset for them to aquire.  Wonder if they would run off managers and above like they did when they bought Orion?  We could use some quality folks back in the states!

  • #7169

    Charles Randall
    Participant

    Yes there was news item on thier 3Q07 Earnings filings about selling Aruba & few others like Krotz Springs, Three Rivers or Ardmore refineries.
    <I sent it in last week for post – but will go ahead and add story now around Aruba sale.>
     
    RE Sale – remember Valero picked up most of its refineries at 10 – 40 cents /dollar of cost type values (Aruba was ~ 15c/$1 at $715MM vs $2.4 B replacement value) – with construction cost at all time highs & oil producers shopping for facilities it is not suprising for them to want to cash out on the highs for refineries that do not fit as well within thier framework.  Some mergers like Premcor which had refineries in Delaware & Pt Arthur that Valero wanted had several others that were part of package that were ~ free if you place a market value on assets Valero wants to keep.
     
    And as article on Aruba mentions it does not produce any gasoline (no FCC or Reformer units) so even though they have expanded its coker capacity & it has visbreaker – it is low on complexity scale and will require lot more investments.  Also Aruba has some exposure on crude supplies.
    regards

  • #7168

    Charles Randall
    Participant

    Anything is possible but…… Hovensa doesn’t fit the purchase cost profile for Valero refineries – it will definitely will not be below 40% of replacement cost since PdVSA is partner on this refinery. And unlike Aruba Hovensa is very complex refiney with recent revamp to its Coking unit. Also don’t think many US Refineries want to get tied tightly into Venezuela crude supplies given Chavez current ability to honor agreements/contracts.
     
    I still think this is just a case of cashing out & trading up on assets as well as avoiding more future investment cost, sounds more like a green eye shade call than refinery strategy call.
    Regards

  • #7167

    Anonymous

    That does sound more correct given Valero’s overall strategy.  Will be interresting to see if some of the smaller U.S. refiners like Murphy for example go after purchase of some of the smaller Valero spin off’s.  Murphy might be interrested but their latest purchase in Wales might hold them back. 

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