Valero 2007 Annual Report Download - page 8

However, VPP Star Site certication is not enough. We are also
focused on process safety. Our Process Safety Management
(PSM) initiative is focused on identifying and implementing best-in-
class processes in our facilities to not only keep our people safe,
but keep our equipment performing properly and reliably. We are
on track to make our PSM program rank among the best in our
industry. Improved reliability is central to our success and the safety
of our employees.


 As part of a 2007 capital expenditure program totaling
$2.8 billion, we successfully commissioned major upgrade projects
at our St. Charles, Houston, Corpus Christi, Ardmore, Port Arthur
and Benicia reneries. We also have announced plans to construct
two state-of-the-art hydrocrackers, one at St. Charles and the other
at Port Arthur, as well as a new coker at Port Arthur. These projects
are the largest ever initiated by Valero and are expected to be a
$3.8 billion investment. When completed over the next three years,
these projects will position our St. Charles and Port Arthur reneries
among the leaders in the U.S. rening industry.

 For our stockholders,
generating the highest returns possible is critical. As we exercise
discipline in allocating capital across our portfolio of assets, we
recognize that it does not make sense to invest strategically in
every plant, particularly our smaller or less-complex facilities.
Hard decisions must be made. Some of our plants may be more
valuable to another owner with a different set of opportunities than
Valero. As an example, the Lima, Ohio renery, which we sold in
2007, was a good t for the acquirer, Husky Energy. Lima renery
employees and the community now have better opportunities.
Today, we are looking at strategic alternatives for four other
reneries: Aruba, Memphis, Krotz Springs and Ardmore. At the end
of this process, we believe that Valero will be a stronger, more
competitive business for all of our stakeholders: our employees, our
investors, our communities and our customers.

 In 2007, we restructured
our retail business to make it more competitive by reducing its
administrative costs. This contributed to our retail division’s most
protable year ever. We also restructured our renery accounting
