St. Charles Refinery TourSt. Charles Refinery TourApril 6, 2008April 6, 2008

Management Presentation

1

Basics of RefiningSt. Charles Refinery OperationsQ&APlant TourConcluding Remarks

Agenda

2

Gary SimmonsVice President

Planning and Economics

3

Crude Oil Characteristics

Crude oils are classified and priced by density and sulfur contentCrude oil density is commonly measured by API gravity• API gravity provides a relative measure of crude oil density • The higher the API number, the lighter the crude oil

Light crude oils are easier to process Heavy crude oils are more difficult to process

Sulfur content is measured as a percentage• Less than 0.7% sulfur content = sweet• Greater than 0.7% sulfur content = sour• High sulfur crude oils require additional processing to meet regulatory

specs

Acid content is measured by Total Acid Number (TAN)• Acidic crude oils are highly corrosive to refinery equipment• High acid crude oils are those with TAN greater than 0.7

4

Arab Heavy

Arab Medium

Arab Light

Alaskan North Slope

Iran Heavy

DubaiMars

TapisWTIBrent

Bonny LightCabinda

Napo

Cold Lake

WCSMaya

Ameriven-Hamaca

M-100 (resid)

1980

19902000

2010Urals

Cerro Negro

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

15 20 25 30 35 40 45 50

Crude Oil Basics

Majority of global crude oil reserves are light/medium sourMost quoted benchmark prices are light sweet crude oils

• WTI (West Texas Intermediate), Western Hemisphere• Brent (North Sea Crude), Europe

Historical trend shows global crude oil supply becoming heavier and more sour

Estimated Quality of Reserves (2007)

14%

19%

66%

1%

High Acid(Sweet)

Source: DOE, Oil & Gas Journal, Company Information

Light/MediumSour

HeavySour

Sweet

SWEE

T

SU

LFU

R C

ON

TEN

T

S

OU

R

HEAVY API GRAVITY LIGHT

Crude Oil Quality by Types

Source: Industry reportsNOTE: Red line represents the average crude oil quality by decade (actual and projected)

5

What’s in a Barrel of Crude Oil?

48%

26%

24%

2%

63%

21%

15%1%

35%

30%

32%

3%> 34 API Gravity

< 0.7 % Sulfur

35% Demand

Most Expensive

24 – 34 API Gravity

> 0.7 % Sulfur

50% Demand

Less Expensive

< 24 API Gravity

> 0.7 % Sulfur

15% Demand

Least Expensive

Refineries upgrade crude oil to higher value products

2006 U.S. Production

8% Propane/Butane

49%

GasolineRFGConventionalCARBPremium

33% DistillateJet FuelDieselHeating Oil

Heavy Fuel Oil & Other

10%

Source: EIA Refiner Production

Refinery Gases8%

Light Sweet(e.g. WTI, LLS, Brent)

Medium Sour(e.g. Mars, Arab Light,Arab Medium, Urals)

Heavy Sour(e.g. Maya, Cerro Negro, Cold

Lake, Western Canadian Select)

Crude Oil Types Characteristics Yields

6

Basic Refining Concepts

DistillationTower

(CrudeUnit)

Propane, Butane and lighter

• Refinery fuel gas • Propane• NGLs

< 90°F

Light Straight Run Gasoline (low octane)

• Gasoline (high octane)90–220°F

Naphtha • Gasoline (high octane)• Jet fuel

220–315°F

Kerosene• Kerosene • Jet fuel• Diesel • Fuel oil

315–450°F

Light Gas Oil• Gasoline (high octane)• Diesel• Fuel oil

450–650°F

Heavy Gas Oil650–800°F

Resid, Pitch800+°F

Furnace

VacuumUnit

More

• Gasoline (high octane)• Diesel• Fuel oil

• Gasoline (high octane)• Diesel• Heavy Fuel Oil, Asphalt• Lube stocks

Intermediates Final Products

processing

More

processing

More

processing

More

processing

More

processing

More

processing

Crude oil

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Hydroskimming/Topping Refinery

LightSweetCrude

Oil

100% Total Yield

Heavy Fuel Oil & Other

30%GasolineRFGConventionalCARBPremium

Propane/Butane

Hydrogen

Crude Unit

Vacuum Unit

Reformer

Propane/Butane

High Octane Gasoline

Heavy Fuel Oil / Resid

LS Diesel/Heating Oil

Distillate Desulfurizer

HS Diesel/Heating Oil

HS Kerosene/Jet Fuel

Gas Oil

4%

32%

34%DistillateDieselHeating OilJet Fuel

Dis

tilla

tion

Tow

er

Low Octane Gasoline and Naphtha

LS Kerosene/Jet Fuel

Simple, low upgrading capability refineries run light sweet crude oil, yet produce a high yield of heavy fuel oil and resid

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Medium Conversion: Catalytic Cracking

Refineries with moderate upgrading capabilities tend to run more sour crude oils while increasing yields of higher value product and experiencing volume gain

Hydrogen

Light Cycle Oil (LCO)

Crude Unit

Vacuum Unit

Reformer

Alkylation Unit

Propane/Butane

High Octane Gasoline

Heavy Fuel Oil / Resid

FCC Gasoline

Alkylate

Distillate Desulfurizer

HS Diesel/Heating Oil

HS Kerosene/Jet Fuel

Gas OilFluid Catalytic Cracker (FCC)

104% Total Yield

Heavy Fuel Oil & Other24%

Dis

tilla

tion

Tow

er

Propane/Butane8%

27%DistillateDieselHeating OilJet Fuel

45%GasolineRFGConventionalCARBPremium

LightSour

Crude

Low Octane Gasoline and Naphtha

LS Kerosene/Jet Fuel

LS Diesel/Heating Oil

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High Conversion: Coking/Resid Destruction

Complex refineries can run heavier and more sour crude oils while achieving the highest yields of light products and greatest volume gain

108% Total Yield

Heavy Fuel Oil & Other

15%

Propane/Butane

7%

28%DistillateJet FuelDieselHeating Oil

58%GasolineRFGConventionalCARBPremium

Hydrogen

LCO

Reformer

Medium Gas Oil

Propane/Butane

High Octane

Heavy Fuel Oil

FCC Gasoline

Kerosene

Alky Gasoline

Hydrogen Plant

Coke

Gas

Diesel

Kerosene/Jet Fuel

Diesel/Heating Oil

Low Octane Gasoline

DelayedCoker

Fluid Catalytic Cracker (FCC)

Alkylation Unit

DistillateDesulfurizer

Crude Unit

Vacuum Unit

Light Gas Oil Hydrocrackate Gasoline

Ultra Low Sulfur Jet/Diesel

Hydrocracker

Medium/Heavy Sour

CrudeOil

Dis

tilla

tion

Tow

er

10

Conversion Economics

Need conversion capacity to capitalize on sour crude oil differentials• Hydroskim – Breakeven or moderate margins; High resid yield

When margins are positive – increase crude oil runsWhen margins are negative – decrease crude oil runs

• Cracking – Better margins; Lower resid yield• Coking – Best margins; Lowest resid yield

Maximize heavy crude oils

U.S. Gulf Coast Refinery Margins

(10)

(5)

0

5

10

15

20

25

30

Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08

US$

/Bbl

Arab Medium Hydroskimming LLS Cracking Maya Coking

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Comparison of Conversion Capacity

Valero is an industry leader in upgrading capacityValero’s upgrading capacity provides superior operational flexibilitySignificant capital investment and long lead time required to add conversion capacity

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

VLO XOM COP BP CVX RDS MRO TSO SUN

Cat Cracking

Hydrocracking

Coking

U.S. Conversion Capacity1MBPD

Source: Oil & Gas Journal, Company Websites 1 Conversion Capacity = Sum of Coking, Hydrocracking and Cat Cracking Capacity

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Ralph PhillipVice President and General Manager

St. Charles Refinery

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Valero St. Charles Refinery

Commissioned in the 1930’s

Acquired by Valero on July 1, 2003. Over $3 billion in upgrades over the past 10 years, $1 billion since Valero acquisition

Located on 1,000 acres adjacent to the Mississippi River with strategic feedstock and product transportation corridors

Owns and operates five docks on the Mississippi River

Connected to the LOOP Crude delivery system and the Colonial products pipeline system

Heavy Sour Crude Facility with nearly 80% of the finished products shipped as Gasoline, ULSD, and other light products

Throughput capacity of 250 MBPD total feedstocks

14

Valero St. Charles Refinery

Staffed with nearly 600 full-time employees and 200 continuing service contractors

Recognized as an “OSHA Voluntary Protection Program Star Site”

Received OSHA VPP “Star Among Stars” Status in 2006-2007

Received Valero Chairman’s Safety Award in 2005 and 2007

Received Valero Chairman’s Environmental Award in 2004

15

St. Charles Products andFeedstock Slate

24.5Mixed LPG

37Slurry (Fuel Oil)

100235Total Liquid Products

<1450Sulfur (Tons/day)

<13,900Pet Coke (Tons/day)

49Propylene

3172Ultra Low Sulfur Diesel

00.3Propane

7

17

36

%

17Alkylate

40High Sulfur VGO

85Gasoline

MBPDProduct

250.85 / 18.5Total LCO

28652.4 / 14.5M-100

13Total Butylene

130.03 / 60Total Naphtha

2660Total Cat Feed

37853.6 / 20.3Maya

100231Total

6150.5 / 22.5LSATB

19450.4 / 24.5LSVGO

1.9 / 30.3

S % / API

70

4

%

160Total Crude

10Mars

MBPDCrude

Typical Product Slate Typical Feedstock Slate

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Over $1,000 MM invested in capital improvements and $130 MM for turnaround maintenance at St. Charles since Valero’s acquisition. Another $3,000 MM is approved for completion prior to the end of 2010.

• Crude/Vacuum/Coker – 40 MBPD crude capacity increaseCompleted in 2004

• Gasoline Desulfurization Unit 60 MBPD CapacityStarted up in 2005

• Utility Systems UpgradesNew 650# Boiler in 2005Refinery water system in 2007

• HT/HC Combination Unit 58 MBPD CapacityStarted up in 2007

• SMR Hydrogen Units 100 MMSCFD CapacityStarted up in 2007

• Facilities UpgradesNew Laboratory in 2005New East plant control room in 2007New Maintenance facility in 2008

St. Charles’ Capital Investments

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St. Charles’ Capital Investments

$1.4 Billion Refinery Upgrade and ExpansionNew 50,000 BPD Gas Oil Hydrocracker45,000 BPD Crude Expansion to 235,000 BPD10,000 BPD Coker Expansion to 80,000 BPDIncreases ULSD production by 49,000 BPD Target 2Q 2010 Completion

$2 Billion CCR/Aromatics ComplexNew 75,000 BPD Continuous Catalytic ReformerUpgrades Naphtha from Valero HydrocrackersProduces 33,000 BPD Para-xyleneProduces 17,000 BPD BenzeneTarget 1Q 2011 Completion

Positions refinery for long term competitiveness

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Appendix

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St. Charles Refinery Flow Diagram

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Optimizing Refining Portfolio

Valero Marketing Presence

Quebec, Canada• 215,000 bpd capacity• 7.8 Nelson complexity

Three Rivers, Texas• 100,000 bpd capacity• 12.4 Nelson complexity

Corpus Christi, Texas• 315,000 bpd capacity• 18.4 Nelson complexity

Wilmington, California• 135,000 bpd capacity• 15.9 Nelson complexity

Benicia, California• 170,000 bpd capacity• 15.0 Nelson complexity

McKee, Texas• 170,000 bpd capacity• 9.4 Nelson complexity

Krotz Springs, Louisiana• 85,000 bpd capacity• 6.5 Nelson complexity• Under Strategic Evaluation

Texas City, Texas• 245,000 bpd capacity• 10.8 Nelson complexity

Houston, Texas• 145,000 bpd capacity• 15.1 Nelson complexity

Port Arthur, Texas• 310,000 bpd capacity• 11.8 Nelson complexity

St. Charles, Louisiana• 250,000 bpd capacity• 14.3 Nelson complexity

Ardmore, Oklahoma• 90,000 bpd capacity• 10.9 Nelson complexity

Memphis, Tennessee• 195,000 bpd capacity• 7.5 Nelson complexity• Under Strategic Evaluation

Paulsboro, New Jersey• 195,000 bpd capacity• 9.1 Nelson complexity

San Nicholas, Aruba• 275,000 bpd capacity• 7.0 Nelson complexity• Under Strategic Evaluation

Delaware City, Delaware• 210,000 bpd capacity• 13.2 Nelson complexity

Capacity shown in terms of crude and feedstock throughputSource: Nelson complexities, Oil & Gas Journal and Valero estimates

Lima, Ohio• 165,000 bpd capacity• SOLD in 2007

Non-Core Refinery Under Strategic Evaluation

Core Refinery

Legend

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Major Refining Processes – Crude Processing

Definition• Separating crude oil into different hydrocarbon groups • The most common means is through distillation

Process• Desalting – Prior to distillation, crude oil is often desalted to remove

corrosive salts as well as metals and other suspended solids.• Atmospheric Distillation – Used to separate the desalted crude oil into

specific hydrocarbon groups (straight run gasoline, naphtha, light gas oil, etc.) or fractions.

• Vacuum Distillation – Heavy crude residue (“bottoms”) from the atmospheric column is further separated using a lower–pressure distillation process. Means to lower the boiling points of the fractions and permit separation at lower temperatures, without decomposition and excessive coke formation.

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Major Refining Processes – Cracking

Definition• “Cracking” or breaking down large, heavy hydrocarbon molecules into

smaller hydrocarbon molecules thru application of heat (thermal) or through the use of catalysts

Process• Coking – Thermal non–catalytic cracking process that converts low value

oils to higher value gasoline, gas oils and marketable coke. Residual fuel oil from vacuum distillation column is typical feedstock.

• Visbreaking – Thermal non–catalytic process used to convert large hydrocarbon molecules in heavy feedstocks to lighter products such as fuel gas, gasoline, naphtha and gas oil. Produces sufficient middle distillates to reduce the viscosity of the heavy feed.

• Catalytic Cracking – A central process in refining where heavy gas oil range feeds are subjected to heat in the presence of catalyst and large molecules crack into smaller molecules in the gasoline and surrounding ranges.

• Catalytic Hydrocracking – Like cracking, used to produce blending stocks for gasoline and other fuels from heavy feedstocks. Introduction of hydrogen in addition to a catalyst allows the cracking reaction to proceed at lower temperatures than in catalytic cracking, although pressures are much higher.

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Major Refining Processes – Combination

Definition• Linking two or more hydrocarbon molecules together to form a large

molecule (e.g. converting gases to liquids) or rearranging to improve the quality of the molecule

Process• Alkylation – Important process to upgrade light olefins to high–value

gasoline components. Used to combine small molecules into largemolecules to produce a higher octane product for blending with gasoline.

• Catalytic Reforming – The process whereby naphthas are changed chemically to increase their octane numbers. Octane numbers aremeasures of whether a gasoline will knock in an engine. The higher the octane number, the more resistance to pre or self–ignition.

• Polymerization – Process that combines smaller molecules to produce high octane blending stock.

• Isomerization – Process used to produce compounds with high octane for blending into the gasoline pool. Also used to produce isobutene, an important feedstock for alkylation.

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Major Refining Processes – Treating

Definition• Processing of petroleum products to remove some of the sulfur,

nitrogen, heavy metals, and other impurities

Process• Catalytic Hydrotreating, Hydroprocessing, sulfur/metals removal –

Used to remove impurities (e.g. sulfur, nitrogen, oxygen and halides) from petroleum fractions. Hydrotreating further “upgrades” heavy feeds by converting olefins and diolefins to parafins, which reduces gum formation in fuels. Hydroprocessing also cracks heavier products to lighter, more saleable products.

• Deasphalting – A process in which the asphaltic constituents of a heavy residual oil are separated by mixing with a liquid solvent. Everything will dissolve in the solvent but the asphaltics, which are subsequently removed.

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List of Refining Acronyms

AGO – Atmospheric Gas OilATB – Atmospheric Tower BottomsB–B – Butane–Butylene FractionBBLS – BarrelsBPD – Barrels Per DayBTX – Benzene, Toluene, XyleneCARB – California Air Resource BoardCCR – Continuous Catalytic RegeneratorDAO – De–Asphalted OilDCS – Distributed Control SystemsDHT – Diesel HydrotreaterDSU – Desulfurization Unit EPA – Environmental Protection AgencyESP – Electrostatic PrecipitatorFCC – Fluid Catalytic CrackerGDU – Gasoline Desulfurization UnitGHT – Gasoline HydrotreaterGOHT – Gas Oil HydrotreaterGPM – Gallon Per MinuteHAGO – Heavy Atmospheric Gas OilHCU – Hydrocracker UnitHDS – HydrodesulfurizationHDT – HydrotreatingHGO – Heavy Gas OilHOC – Heavy Oil Cracker (FCC)H2 – HydrogenH2S – Hydrogen SulfideHF – Hydroflouric (adic)HVGO – Heavy Vacuum Gas OilkV – Kilovolt

kVA – Kilovolt AmpLCO – Light Cycle OilLGO – Light Gas OilLPG – Liquefied Petroleum GasLSD – Low Sulfur DieselLSR – Light Straight Run (Gasoline)MON – Motor Octane NumberMTBE – Methyl Tertiary–Butyl EtherMW – MegawattNGL – Natural Gas LiquidsNOX – Nitrogen OxidesP–P – Propane–PropylenePSI – Pounds per Square InchRBOB – Reformulated Blendstock for Oxygen Blending RDS – Resid DesulfurizationRFG – Reformulated GasolineRON – Research Octane NumberRVP – Reid Vapor PressureSMR – Steam Methane Reformer (Hydrogen Plant)SOX – Sulfur OxidesSRU – Sulfur Recovery UnitTAME – Tertiary Amyl Methyl EtherTAN – Total Acid NumberULSD – Ultra–low Sulfur DieselVGO – Vacuum Gas OilVOC – Volatile Organic CompoundVPP – Voluntary Protection ProgramVTB – Vacuum Tower BottomsWTI – West Texas IntermediateWWTP – Waste Water Treatment Plant

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Safe Harbor StatementStatements contained in this presentation that state the Company'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 "believe," "expect," "should," "estimates," and other similar expressions identify forward–looking statements. It is important to note that actual results could differ materially from those projected in such forward–looking statements. For more information concerning factors that could cause actual results to differ from those expressed or forecasted, see Valero’s annual reports on Form 10-K and quarterly reports on Form 10-Q, filed with the Securities and Exchange Commission, and available on Valero’s website at www.valero.com.