Valero Announces Notice to the California Energy Commission Regarding its Benicia, California, Refinery

Rhea-AI Summary

Valero Energy (NYSE: VLO) has announced that its subsidiary plans to potentially idle, restructure, or cease refining operations at its Benicia Refinery in California by the end of April 2026. The company is evaluating strategic alternatives for its remaining California operations.

In connection with this strategic evaluation, Valero has recorded a combined pre-tax impairment charge of $1.1 billion for the Benicia and Wilmington refineries, which will be treated as a special item and excluded from first quarter 2025 adjusted earnings. This amount includes expected asset retirement obligations of $337 million as of March 31, 2025.

Positive

• Impairment charges will be excluded from Q1 2025 adjusted earnings

Negative

• Potential closure or restructuring of Benicia Refinery operations by April 2026
• $1.1 billion pre-tax impairment charge for California refineries
• $337 million in expected asset retirement obligations
• Uncertain future for remaining California operations

SAN ANTONIO--(BUSINESS WIRE)-- Valero Energy Corporation (NYSE: VLO, “Valero”) announced today that its subsidiary, Valero Refining Company-California, has submitted notice to the California Energy Commission of its current intent to idle, restructure, or cease refining operations at Valero’s Benicia Refinery by the end of April 2026. Valero continues to evaluate strategic alternatives for its remaining operations in California. “We understand the impact that this may have on our employees, business partners, and community, and will continue to work with them through this period,” said Lane Riggs, Chairman, CEO and President of Valero.

In connection with the evaluation of strategic alternatives for Valero’s operations in California, a combined pre-tax impairment charge of $1.1 billion was recorded for the Benicia and Wilmington refineries, and is expected to be treated as a special item and excluded from first quarter 2025 adjusted earnings. Also included in this amount is the recognition of expected asset retirement obligations of $337 million as of March 31, 2025.

About Valero
Valero Energy Corporation, through its subsidiaries (collectively, Valero), is a multinational manufacturer and marketer of petroleum-based and low-carbon liquid transportation fuels and petrochemical products, and sells its products primarily in the United States (U.S.), Canada, the United Kingdom (U.K.), Ireland and Latin America. Valero owns 15 petroleum refineries located in the U.S., Canada and the U.K. with a combined throughput capacity of approximately 3.2 million barrels per day. Valero is a joint venture member in Diamond Green Diesel Holdings LLC, which produces low-carbon fuels including renewable diesel and sustainable aviation fuel (SAF), with a production capacity of approximately 1.2 billion gallons per year in the U.S. Gulf Coast region. See our annual report on Form 10-K for more information on SAF. Valero also owns 12 ethanol plants located in the U.S. Mid-Continent region with a combined production capacity of approximately 1.7 billion gallons per year. Valero manages its operations through its Refining, Renewable Diesel, and Ethanol segments. Please visit investorvalero.com for more information.

Safe-Harbor Statement
Statements contained in this press release that state Valero’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 “evaluate” “believe,” “potential,” “expect,” “should,” “estimates,” “intend,” “target,” “commitment,” “plans,” “forecast, “guidance” and other similar expressions identify forward-looking statements. Forward-looking statements in this release include statements relating to Valero’s actions and operations in California, expected timing and cost of obligations, future market and industry conditions, and future operating and financial performance, among other matters. It is important to note that actual results could differ materially from those projected in such forward-looking statements based on numerous factors, including those outside of Valero’s control, such as legislative or political changes or developments, market dynamics, cyberattacks, weather events, and other matters affecting Valero’s operations and financial performance or the demand for Valero’s products. These factors also include, but are not limited to, the uncertainties that remain with respect to current or contemplated legal, political or regulatory developments that are adverse to or restrict refining and marketing operations, or that impose taxes or penalties on profits, windfalls, or margins above a certain level, tariffs, global geopolitical and other conflicts and tensions, the impact of inflation on margins and costs, economic activity levels, and the adverse effects the foregoing may have on Valero’s business plan, strategy, operations and financial performance. Other unpredictable or unknown factors not discussed in this release could also have material adverse effects on forward-looking statements. Additionally, the asset retirement obligations recorded require significant judgment and are subject to changes in the underlying assumptions. For more information concerning these and other factors that could cause actual results to differ from those expressed or forecasted, see Valero’s annual report on Form 10-K, quarterly reports on Form 10‑Q, and other reports filed with the Securities and Exchange Commission and available on Valero’s website at www.valero.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250415977846/en/

Investors:

Homer Bhullar, Vice President – Investor Relations and Finance, 210-345-1982

Eric Herbort, Director – Investor Relations and Finance, 210-345-3331

Gautam Srivastava, Director – Investor Relations, 210-345-3992

Media:

Lillian Riojas, Executive Director – Media Relations and Communications, 210-345-5002

Source: Valero Energy Corporation

FAQ

When will Valero (VLO) potentially cease operations at its Benicia Refinery?

Valero plans to potentially idle, restructure, or cease refining operations at the Benicia Refinery by the end of April 2026.

How much is the impairment charge Valero (VLO) recorded for its California refineries?

Valero recorded a combined pre-tax impairment charge of $1.1 billion for the Benicia and Wilmington refineries.

What are the asset retirement obligations for Valero's (VLO) California refineries?

Valero expects asset retirement obligations of $337 million as of March 31, 2025.

How will the $1.1 billion impairment charge affect Valero's (VLO) Q1 2025 earnings?

The impairment charge will be treated as a special item and excluded from first quarter 2025 adjusted earnings.