Valero Energy in talks to sell closed Delaware refinery

Valero Energy Corporation, a Fortune 500 oil and gas refining and retail company, said yesterday that it is in advanced negotiations to sell its closed Delaware City oil refinery to PBF Investments, LLC.

In November 2009, the San Antonio, Texas-based Valero had stopped all operations at the 52-year-old plant having a refining capacity of 210,000 barrel-per-day and laid off 550 employees. Governor of Delaware Jack Markell has been coordinating with the state economic development officials to find a buyer to revive the refinery.

Valero, which has been losing $1 million a day last year operating the Delaware City Refinery, has agreed that it would not remove process equipment while negotiations are underway, Markell and Valero chairman and CEO Bill Klesse said in a statement, "We have worked very closely with Governor Markell, who has been instrumental in furthering these negotiations."

Valero, which had revenue of $119.11 billion in 2008, said there is no specific timetable for when negotiations might be completed and the parties are continuing their discussions.

Greenwich, Connecticut-based PBF Investments is backed by three of the world's leading energy and financial enterprises - Petroplus Holdings AG, The Blackstone Group, and First Reserve Corp - which aim is to acquire oil refineries and related facilities throughout North America.

Petroplus Holdings AG is the largest independent refiner and wholesaler of petroleum products in Europe. Petroplus, which focuses on refining, currently owns and operates six refineries across Europe.

Valero had acquired the Delaware City refinery in 2005 for $8 billion in a package deal that included 4 other refineries, including a plant in Ohio, which has since closed.

But, with oil prices plummeting last year and most refineries in North America making heavy losses, plants like Delaware City, whose value had soared during the height of the oil boom, is presently worth about 10 per cent of their purchase value.