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Strategic Sourcing in Insurance

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					VALERO ENERGY CORP/TX
8-K
05/12/2005

NO TITLE




           Delaware                                 1-13175                     74-1828067
 (State or other jurisdiction               (Commission File Number)          (IRS Employer
      of incorporation)                                                    Identification No.)

                 One Valero Way
               San Antonio, Texas                                        78,249
    (Address of principal executive offices)                           (Zip Code)

                            Registrant s telephone number, including
                                  area code: (   210) 345-2000



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VALERO ENERGY CORP/TX
8-K
05/12/2005

NO TITLE




                     VALERO ENERGY CORPORATION


Date: May 12, 2005   By: /s/ Jay D. Browning
                         Jay D. Browning
                         Vice President and Secretary


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VALERO ENERGY CORP/TX
8-K
05/12/2005

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           PADD I                             % of
                                              PADD
   Sunoco                         655,000     ####   %
   ConocoPhillips                 423,000     ####   %
Valero - Premcor                  341,000     ####   %
   Premcor                        175,000     ####   %
   Valero                         166,000     ####   %
   United Refining                 66,700     4.20   %
   Total PADD I                 1,574,000 *


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VALERO ENERGY CORP/TX
8-K
05/12/2005

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           PADD II                          % of
                                            PADD
   MAP                          631,000     ####   %
   BP                           546,250     ####   %
   ConocoPhillips               493,000     ####   %
Valero - Premcor                431,750     ####   %
   Premcor                      346,750     9.90   %
   Flint Hills                  257,213     7.40   %
   Valero                        85,000     2.40   %
   Total PADD II              3,492,613


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VALERO ENERGY CORP/TX
8-K
05/12/2005

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           PADD III                             % of
                                                PADD
   ExxonMobil                       1,586,000   ####   %
Valero - Premcor                    1,239,000   ####   %
   Royal Dutch Shell                1,203,700   ####   %
   Valero                             989,000   ####   %
   ConocoPhillips                     851,700   ####   %
   CITGO                              575,064   7.10   %
   Premcor                            250,000   3.10   %
   Total PADD III                   8,052,965


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VALERO ENERGY CORP/TX
8-K
05/12/2005

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           PADD IV                          % of
                                            PADD
   Sinclair                     94,500      ####   %
   Suncor Energy                60,000      ####   %
   ExxonMobil                   60,000      ####   %
   Tesoro                       60,000      ####   %
   ConocoPhillips               58,000      9.80   %
Valero - Premcor                28,000      4.70   %
   Valero                       28,000      4.70   %
   Premcor                                  0.00   %
   Total PADD IV               590,700


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VALERO ENERGY CORP/TX
8-K
05/12/2005

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                                              % of
          PADD V                              PADD
   ChevronTexaco                    539,000   ####   %
   BP                               496,900   ####   %
   Tesoro                           441,200   ####   %
   Royal Dutch Shell                406,200   ####   %
   ConocoPhillips                   337,700   ####   %
Valero - Premcor                    217,500   7.30   %
   Valero                           217,500   7.30   %
   Premcor                                    0.00   %
 Total PADD V                     2,999,600


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VALERO ENERGY CORP/TX
8-K
05/12/2005

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           Significantly accretive to earnings and
           cash flow per share
                                     14% accretive to estimated 2006 Case earnings
                                     per share
                                     13% accretive to estimated 2006 Case cash
                                     flow per share

           At least $350 million of annually recurring
           synergies

           Expect to retain investment grade credit
           rating



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VALERO ENERGY CORP/TX
8-K
05/12/2005

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($ per barrel)                          2004.00    2005.00    2006.00
WTI                                        41.45      53.15      52.00
USGC Gas Crack                              7.69       6.91       7.50
USGC High Sulfur Heat Crack                 3.95       7.46       8.00
Arab Medium crude vs. WTI                 (6.36)     (9.06)     (8.25)
Maya crude vs. WTI                       (11.47)    (16.44)    (15.00)


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 Mid-Cycle
01- 05 Avg.
       35.55
        5.87
        3.73
      (5.60)
      (9.78)
VALERO ENERGY CORP/TX
8-K
05/12/2005

NO TITLE




            2006 Earnings Per Share               2006 Free Cash Flow ($MM)

                [CHART]                                    [CHART]

           2006 Free Cash Flow / Debt       2006Year-End Net Debt / Capitalization

                [CHART]                                    [CHART]


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VALERO ENERGY CORP/TX
8-K
05/12/2005

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Synergies and Other Savings/Improvements      $MM/year
    Corporate SG&A Savings                                $55

    Incentive Compensation                                $60


    Crude Financing Cost                                  $15


    Strategic Sourcing - Refineries                       $15

    Insurance Cost Reduction                              $15

    Crude Supply Savings                                  $15


    Coker/FCC/Gasifier Reliability Delaware              $100
City



    Delaware City integration with Valero                 $10




    Memphis FCC Revamp/ Discounted crude                  $50




    Memphis Integration with Krotz Springs                 $5


    Energy Conservation - All Refineries                  $10


Total achievable in 2007                                 $350


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                     Comments
Headquarters expense, marketing cost

Premcor vs. Valero bonus, stock option
expense

Letter of credit savings, Morgan Stanley
financing facility

Catalyst, chemicals, operating supplies

Premcor cost vs. Valero rate basis

Cargo sharing & flexibility - Delaware
City & Port Arthur

Improved rates, feedstock optimization
(Gasifier from 1200 to 1800 st/d, coker
from 38-48 Mbpd, slurry feed to coker, oxygen
enrichment of FCC, heavier crude slate)

Isobutane, propylene, benzene production
(utilize spare Butamer capacity for Paulsboro
isobutane, spare extraction capacity
for Quebec benzene concentrate, propylene
recovery)

Catalyst cooler and oxygen enrichment
improves refinery utilization (FCC expansion
from 68 to 78 Mbpd, better utilization of
crude and downstream capacity - crude from
165 to 180 Mbpd; high-TAN crude slate)

Process Krotz Springs high sulfur distillate
at Memphis

Miscellaneous projects utilizing Valero
best practices.

				
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