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Wed 30 Jul 2008, 10:02 GMT

Aruba refinery still up for sale


Valero CEO says it continues to pursue the sale of its refinery in Aruba.

U.S. refiner and bunker supplier Valero Energy Corporation has revealed that it still plans to sell its 255,000 barrel-per-day refinery in Aruba.

In a company statement, Bill Klesse, Valero’s Chairman of the Board and Chief Executive Officer, said the company planned to continue to pursue a potential transaction for the Aruba refinery from where it also carries out bunkering operations.

The announcement follows a statement made by Valero earlier this year when the company revealed it had been negotiating the sale of the Aruba refinery. Speaking in April, Klesse said "We are working closely with a prospective buyer for the Aruba refinery and expect to have an announcement this quarter."

The company had said the potential sale of the Aruba refinery was part of the company's overall strategic review of its current refining portfolio to maximize profits for shareholders.

Speaking in a quarterly earnings conference call this week, Klesse said Valero was in talks with a potential buyer, but did not reveal the name of the company in question.

Brazilian energy giant Petroleo Brasileiro S.A. is reported to have been negotiating the purchase of the Aruba refinery for months. In May the company indicated that it had not set a deadline for a decision regarding the purchase. Almir Barbassa, Chief Financial Officer of Petrobras said that the company's objective was to find "the right refinery for the right price in the right spot", but it had not set a time target.

Barbassa also indicated in May that the Brazilian oil firm was evaluating other possible refinery purchases in order to increase the company's refining capacity outside Brazil. He pointed out that Petrobras would be willing to pull out of the Aruba refinery deal if it felt the conditions were not right to go ahead with the purchase.

Market sources reported in April that Petrobras had agreed to buy the Aruba refinery for approximately US$2.8 billion before a fire took place on January 25th in a vaccuum distillation unit, which carries out the initial breakdown of crude oil in the refining process.

Valero paid US$465 million for the Aruba refinery just four years ago.

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