HOUSTON, Oct 8 (Reuters) - Leading U.S. refiner Valero Energy Corp will not rule out 'strategic alternatives' including possible shutdowns at any of its 16 refineries in current economic downturn, a company spokesman said on Thursday.
The company is not necessarily willing to sell any refineries, but strategic alternatives would include possible refinery or unit shutdowns to contend with crushed demand in the recession, said spokesman Bill Day.
'We wouldn't rule out strategic alternatives at any of our refineries,' Day told Reuters in an interview.
Valero's announcement comes days after fellow independent
refiner Sunoco Inc began shutting down a refinery in the New Jersey suburbs east of Philadelphia.
Previously, Valero used the term strategic alternatives when it put a refinery up for sale.
Chairman and Chief Executive Bill Klesse reiterated to employees in a memo this week that Valero was still aggressively pursuing strategic alternatives for refineries in Paulsboro, New Jersey, Delaware City, Delaware, and Aruba, according to sources familiar with the document.
The 235,000 bpd Aruba refinery has been on the block since 2007.
'There's been no movement on a deal at that refinery,' said a source familiar attempts to sell it.
Aruban officials have said PetroChina is a would-be buyer of the refinery. Petrobras has also been identified as a potential buyer.
Valero has never confirmed the identity of possible buyers of any of its refineries.
To cut costs at Paulsboro, Day said, Valero is offering early retirement packages to 100 employees out of a refinery workforce of 550.
The Paulsboro refinery is in the same New Jersey county as the refinery Sunoco is shutting.
Valero's struggle illustrates how much U.S. refining economics have changed since the recession began in the fall of the 2008.
Twenty-two months ago, Klesse identified 12 of 18 refineries Valero owned at that time as 'core' to the company's future and which Valero would invest in.
Among those core plants was the 210,000 bpd Delaware City refinery, where Valero recently shut a coker and gasifier unit. laying off workers on those units.
Rumors continue to swirl the Delaware City refinery may be shut indefinitely sometime in 2010. Day said again on Thursday Valero has no plans to shut the plant.
Valero shut the Aruba refinery in July as a temporary measure during the downturn. It became an indefinite shutdown in late August as market conditions failed to improve.
At its Corpus Christi, Texas, refinery Valero has shut a gasoline unit and a coking unit. The company has also reduced production levels at other refineries.
Day said legislation passed earlier this year by the U.S. Congress to reduce carbon emissions makes the long-term outlook for independent refiners like Valero doubtful.
Valero has previously said the legislation could cost the company between $6 billion and $7 billion, equal to Valero's earnings in 2006, one of the company's best years.
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