Valero 1Q15 Earnings Call Notes

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Crude price spreads have been favorable for us

“On a percentage discount basis these crude were priced more favorably in 2015. For example, in the first quarter of 2015 my [ph] priced on average at a 20% discount to Brent versus a 17% discount in the first quarter of 2014. Our significant crude side flexibility allows us to adjust feedstocks and optimize margins based on the discount environment.”

Cracks continue to be strong, seeing good demand

“Yes, I think we are – the cracks continue to be strong and we continue to see good discounts on the crude. The big change probably has been in the crude market, some of the discounts could commence and we’re run the lot more light sweet crude in our system today than what we did in the first quarter. But again I think we’re seeing good demands both in the export markets and domestic demands. And so feel very encouraged about the profitability moving forward.”

Don’t expect us to be moving up or down stream

“I don’t think you should expect us though to be looking upstream from where we are today in any material way or significantly downstream from where we are today. Although opportunities present themselves and you look at it but certainly that’s not part of our plan today.”

Kuwait seems interested in maintaining, growing market share

“Doug I would tell that primarily what we see from Kuwait is really not light sweet is more medium sour barrels and I would tell you that we have had many discussions with them and they seem interested on maintaining or actually growing market share in the U.S. on that grades of crude and the light sweet what we see happened is with all this volatility in the Brent TI moving in and out when the order comes in very narrow then we start to see incentives to import light sweet.”

Location advantage running domestic crudes

“I think overall even if the export ban is lifted we would continue to have a location advantage running the domestic crudes. We continue to have significant operating costs advantage with the cheap natural gas. And then we’re very happy with our portfolio of refining assets that are very complex very efficient refineries.”