Valero 2003 Annual Report Download - page 17

Download and view the complete annual report

Please find page 17 of the 2003 Valero annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 33

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33

top฀feedstock฀&฀product฀slates
14
Bob Beadle, Senior Vice President of Crude & Feedstock Supply & Trading, works
to ensure that Valero’s reneries are running the most economical crude oils and
feedstocks. The company’s strategy of investing in its reneries to enable them
to process sour crude, which sells at a discount to sweet crude, gives Valero an
advantage over its peers.
Valero’s฀feedstock฀and฀product฀slates฀have฀helped฀the฀company฀gain฀a฀competitive฀edge฀over฀
other฀reners.฀
In฀fact,฀Valero฀has฀the฀most฀complex฀rening฀system฀among฀the฀independent฀reners฀with฀
a฀complexity฀rating฀of฀11.6฀versus฀its฀peer฀group’s฀average฀of฀9.2฀as฀ranked฀by฀the฀Nelson฀
Complexity฀Scale.฀That฀means฀that฀Valero’s฀reneries฀are฀able฀to฀produce฀a฀high฀percentage฀
of฀ clean-burning฀ and฀ low-sulfur฀ products฀ from฀ lower-quality฀ crude฀ oils,฀ which฀ sell฀ at฀ a฀
discount฀to฀sweet฀crude฀oil.฀
What’s฀more,฀Valero฀is฀investing฀in฀its฀rening฀system฀to฀increase฀its฀sour฀crude฀oil฀capacity฀
from฀ about฀ 73%฀ to฀ 78%฀ of฀ total฀ crude฀ capacity.฀ This฀ is฀ important฀ because฀ every฀ $1฀
improvement฀ in฀ the฀ sour฀ crude฀ discount฀ generally฀ improves฀ Valero’s฀ earnings฀ by฀ about฀
$2.25฀per฀share!฀฀฀฀
In฀ addition,฀ Valero฀ has฀ one฀ of฀ the฀ most฀ extensive฀ slates฀ of฀ high-value,฀ clean-burning฀
products฀in฀the฀industry.฀Nearly฀40%฀of฀Valero’s฀gasoline฀slate฀is฀clean-burning,฀including฀
reformulated฀gasoline,฀California’s฀ CARB฀ gasoline,฀ boutique฀fuels฀ and฀ blendstocks.฀And,฀
75%฀of฀the฀company’s฀distillates฀are฀low-sulfur฀diesel฀and฀jet฀fuel.฀In฀fact,฀Valero฀was฀one฀of฀
the฀rst฀reners฀in฀the฀U.S.฀Southwest฀and฀California฀to฀introduce฀ultra฀low-sulfur฀diesel฀
well฀ahead฀of฀the฀Environmental฀Protection฀Agency’s฀2006฀deadline.
Since฀Valero฀entered฀the฀rening฀business฀in฀the฀early฀‘80s,฀the฀company’s฀strategy฀has฀been฀
to฀process฀the฀most฀economical฀crude฀oils฀into฀premium฀products.฀It฀was฀the฀right฀strategy฀
then,฀and฀as฀Valero’s฀earnings฀show,฀it’s฀still฀the฀right฀one!