The oil refiners Valero Energy Corporation announced today that Greg King has decided to resign as President effective December 31, 2007, he was elected in 2003.
"This was unexpected, but I want to thank Greg for his dedication to Valero's success over his more than 14 years with the company," said Bill Klesse, Chairman of the Board and Chief Executive Officer.
King's resignation comes as Valero, the U.S.'s largest refiner by capacity, moves to divest some plants in anticipation of an era of leaner profit margins.Valero sold one refinery in May, is considering selling a second, and may divest additional plants during 2008, according to Klesse.
The company owns and operates 17 refineries throughout the United States, Canada and the Caribbean with a combined throughput capacity of approximately 3.1 million barrels per day, making it the largest refiner in North America. Valero is also one of the nation's largest retail operators with approximately 5,800 retail and branded wholesale outlets in the United States, Canada and the Caribbean under various brand names including Valero, Diamond Shamrock, Shamrock, Ultramar, and Beacon.
A messy but profitable business over many years.
D.J. Peterson and Sergej Mahnovski did an in -depth analysis of the U.S. oil refining industry, which was published as a report by the RAND Corporation on August 28, 2003 "New Forces at Work in Refining" (ISBN: 0-8330-3436-7) which was ignored by the political leaders."New Forces at Work in Refining" \\ Read more about how this study forecast the problems of the refining industry, the rise in prices and problems of retaining a workforce ..here 15/03/04 also see the Rand Press Release
The price history at the pump was already writen...
The industry shakeout has left just 58 companies operating refineries, a dramatic consolidation from the 189 refining firms 22 years ago. The remaining plants now operate at 92 percent of their capacity, up from 78 percent in 1985.
The decline in unused manufacturing capacity and other efficiencies allowed the industry in 2001 to report the highest profit margins seen by the Energy Information Administration since it started collecting the information in 1979.
The reduction of spare capacity has helped drive up prices at the pump and leaves the market vulnerable to shortages caused by a plant breakdown or other unpredictable events. Industry leaders appear to have accepted the situation, seeing no economic logic in straining for more capacity.
"I think the industry has learned that it's okay to fall short on product," said an industry observer. "There is no reward being long on product or production capacity."
Added another: "Every investment a refiner makes is stranded in his eyes…you win by doing nothing."