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Suncor Energy acquires second refinery near Denver, Colorado Purchase expands Suncor’s downstream capacity, a key step in oil sands growth strategy

San Antonio, TX - June 01, 2005 |

Suncor Energy Inc. announced today that its U.S. subsidiary has expanded its refining operations by acquiring a Valero Energy Corporation (NYSE: VLO) refinery adjacent to Suncor’s refinery in Commerce City, Colorado, just outside of Denver. 

 Suncor Energy (U.S.A.) Inc. yesterday purchased the Colorado Refining Company, an indirect wholly-owned subsidiary of Valero. The purchase price was US$30 million (CDN$37 million) plus working capital and associated oil and product inventory. Colorado Refining Company’s principal assets are Valero’s Commerce City refinery and a products terminal located in Grand Junction, Colorado. The purchase is not subject to regulatory approval. 

The 30,000 barrel per day (bpd) refinery is located next to Suncor’s existing refinery, which was acquired in 2003. Suncor intends to fully integrate the two operations, providing a combined refining capacity of approximately 90,000 bpd. 

With the purchase, Suncor is assuming Valero’s 140 employees and the existing contract with the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International (USW) Union, Local 5-477. Suncor will continue to provide refined products to retail customers through Phillips 66 service stations in Colorado and to commercial customers throughout the U.S. Rocky Mountain region. 

“This acquisition provides an immediate expansion of our presence in the Rocky Mountain marketplace,” said Rick George, Suncor’s president and chief executive officer. “With a capacity of 90,000 barrels per day, the integrated operation is expected to be more competitive with refineries in Texas and Oklahoma.”

Valero’s chairman and chief executive officer Bill Greehey added, “These two plants belong together under one company because they are much stronger and have a much brighter future together than either has individually. In addition to Suncor providing employees with compensation and benefits programs comparable to ours, the integration of these operations will provide greater opportunities for growth and a brighter future.”

Suncor, which operates an oil sands production facility in northern Alberta, Canada, has long-term plans that include integrating its growing crude oil production into the U.S. energy market through investments in refining assets. However, local crude oil suppliers currently providing feedstock to the Valero refinery would not be affected by the transaction.

"With a target to increase our oil sands production to more than a half million barrels per day, building stable access to strategic markets is a key part of our long-term growth strategy," said George. 

Suncor will continue seeking additional downstream integration opportunities as part of its growth strategy. Such opportunities could include long-term contracts, joint ventures and the potential purchase of further refining assets or the expansion of Suncor’s existing assets.

This news release contains forward-looking statements that address goals, expectations or projections about the future. These statements are based on Suncor’s current goals, expectations, estimates, projections and assumptions, as well as its current budgets and plans for capital expenditures. Some of the forward-looking statements may be identified by the words “expected”,  “plans”, would”, “target” and similar expressions. These statements are not guarantees of future performance. Actual results could differ materially, as a result of factors, risks and uncertainties, known and unknown, to which Suncor’s business is subject. Further discussion of the risks, uncertainties and other factors that could affect these plans, and any actual results, is included in Suncor’s annual report to shareholders and other documents filed with regulatory authorities.

Suncor Energy Inc. is an integrated energy company headquartered in Calgary, Alberta. Suncor’s oil sands business, located near Fort McMurray, Alberta, extracts and upgrades oil sands and markets refinery feedstock and diesel fuel, while operations throughout Western Canada produce natural gas. Suncor operates a refining and marketing business in Ontario with retail distribution under the Sunoco brand. U.S.A. downstream assets include refining operations in Colorado and retail sales in the Denver area under the Phillips 66 brand. Suncor’s common shares (symbol: SU) are listed on the Toronto and New York stock exchanges. Sunoco in Canada is separate and unrelated to Sunoco in the United States, which is owned by Sunoco, Inc. of Philadelphia.

Valero Energy Corporation is a Fortune 500 company based in San Antonio, with approximately 20,000 employees and annual revenue of approximately $55 billion.  The company owns and operates 14 refineries throughout the United States, Canada and the Caribbean. Valero's refineries have a combined throughput capacity of approximately 2.5 million barrels per day, which represents approximately 12 percent of the total U.S. refining capacity. Valero is also one of the nation's largest retail operators with more than 4,700 retail and branded wholesale outlets in the United States, Canada and the Caribbean under various brand names including Diamond Shamrock, Shamrock, Ultramar, Valero, and Beacon. Please visit www.valero.com for more information.

Suncor Contacts:

Media inquiries: Brad Bellows 403-269-8717 (Canada); Lisha Burnett 303-793-8012 (U.S.)

Investor inquiries: John Rogers 403-269-8670

 Valero Contacts:

Media inquiries:  Mary Rose Brown 210-345-2314

Investor inquiries:  Eric Fisher 210-345-2896

 Additional Information

The Valero refinery relies primarily on a varying blend of domestic crude oil for feedstock. The 30,000 bpd capacity refinery is configured as a fuels refinery. It supplies about 15% of Colorado’s gasoline and diesel fuel. The refinery is located approximately six miles (about 10 km) northeast of downtown Denver in Commerce City. It has been operating since 1937. Assets outside of the refinery include a products terminal located in Grand Junction, Colorado. 

  • Suncor businesses in Canada and the United States include:
    •  core oil sands business in Alberta (Suncor pioneered commercial crude oil production in northern Alberta’s Athabasca oil sands in 1967)
    •  conventional natural gas production in Western Canada
    • downstream refining, marketing and retail businesses in Ontario and Colorado
  • Suncor is committed to producing hydrocarbon fuels to meet today’s needs while supporting the development of new markets for renewable energy. Suncor’s participation in wind power projects in Alberta and Saskatchewan is one part of that strategy. The projects provide about 10% of Canada’s wind-generated electricity and offset 115,000 metric tonnes of carbon dioxide per year. 
  • Suncor employs more than 4,500 people, with more than 700 employees based in the U.S.A. (including 250 employees at its retail sites). Suncor’s President and Chief Executive Officer, Rick George, is originally from Brush, Colorado.
  • Suncor’s goal is to increase oil sands production to more than a half million barrels per day:
    • current production capacity is expected to increase to 260,000 bpd by the end of 2005
    • expansion projects are planned to further boost production capacity to 350,000 bpd in 2008
    • in 2010 to 2012, the addition of a third complete upgrader is expected to drive Suncor’s production capacity to 500,000 to 550,000 bpd
  • Suncor’s leases contain estimated volumes of bitumen (a tar-like, heavy oil) sufficient to produce a potential 11 billion barrels of conventional quality crude oil.
  • Suncor’s growth strategy is combined with a broad vision of sustainability that recognizes the importance of increasing shareholder value, reducing environmental impacts and contributing to the well-being of the communities in which we operate.
  • In 2004, Suncor contributed more than CDN$7 million to a variety of community and Aboriginal initiatives, as well as charitable organizations supported through the Suncor Energy Foundation.

More information available at www.suncor.com



Senior Vice President, Corporate Communications
  Mary Rose Brown
  One Valero Way
  San Antonio, TX USA 78249-1616
  (210) 345-2314
  maryrose.brown@valero.com