Valero's Greehey to step down as CEO; Becraft to take helm.

SAN ANTONIO, Texas--(BUSINESS WIRE)--Feb. 16, 1996--Bill Greehey, chairman and chief executive officer (CEO) of Valero Energy Corporation (NYSE: VLO), announced today that he will step down as CEO effective June 30. Joe Becraft, current president and chief operating officer, will succeed Greehey as CEO effective the same day. Greehey will continue as chairman of Valero's board of directors.

Becraft, 52, is a well-respected veteran in the natural gas industry, with a career spanning more than 30 years. After serving as senior vice president and chief operating officer of Valero's natural gas division in the 1980s, he was president and CEO of Transok, Inc. in Tulsa, Oklahoma until last year. Transok is a major gas gatherer, processor and marketer in Oklahoma and Texas and is owned by Central and South West Corporation, one of the nation's largest utility holding companies and consumers of natural gas.

During his six-year tenure as Transok's CEO, Becraft tripled Transok's assets and took the company from a net loss to a net income of more than $25 million.

His extensive background also has included management positions with Northwest Pipeline Corporation and Northern Natural Gas Company. Currently, Becraft is the president-elect of the Gas Processors Association and serves on the boards of the Southern Gas Association and the Association of Texas Intrastate Natural Gas Pipelines. He is a graduate of Drake University and the Harvard Business School Program for Management Development.

Greehey, who will turn 60 in June, said the decision to retire was difficult. "It's a hard decision to make, but it's the right one," he said. "After 22 challenging and rewarding years as CEO, the time is right to turn the company over to new leadership. The company is in better shape financially and operationally than ever before and we are well positioned to continue that growth. I believe Joe is the perfect person to lead Valero into the future.

"He's been in the energy business all his life, he knows every aspect of the industry and he's a hands-on guy who works well with employees at every level. As a business strategist, Joe's track record speaks for itself. His turnaround of Transok is proof of that," Greehey said.

Becraft said he plans to focus on several goals as he takes over as chief executive officer, including exploring the acquisition of assets complimentary to Valero's three core businesses (refining, natural gas and natural gas liquids). In addition, the company is developing new initiatives in the areas of natural gas field services, natural gas liquids marketing and electric power trading. Becraft emphasized that maintaining a strong balance sheet will be a key priority as the company pursues its future goals.

While remaining as Valero's chairman of the board, Greehey plans to focus on the strategic direction of the company. He also will retain his key role as Valero's negotiator with Pemex, Mexico's national oil and gas company, on the planning of a $450 million MTBE plant near Coatzacoalcos, Veracruz. (MTBE is the main blending component used in the production of clean-burning fuels.)

Becraft said he looks forward to Greehey's continued involvement. "Valero and Greehey are synonymous. He took a struggling company that was mired in litigation and created what you see today: a Fortune 500 corporation with more than 1,600 employees and nearly $3 billion in assets, including the largest gas pipeline in the state of Texas, eight natural gas liquids plants and one of the most technologically advanced petroleum refineries in the world."

After he steps down as CEO, Greehey plans to devote more time to community work in San Antonio and to pursue personal interests.

GREEHEY AND THE CREATION OF VALERO

Greehey has been in the oil and gas industry for 35 years and has headed Valero since its inception. Originally a certified public accountant, he began his energy career in 1961 at Exxon U.S.A. In 1963 he joined Coastal States Gas Corporation. He quickly rose through the ranks, becoming senior vice president-finance and chief financial officer in 1971.

In 1974 he was named president and CEO of LoVaca Gathering Company, a subsidiary of Coastal. At that time, Coastal had many long-term gas contracts at fixed prices that became impossible to fulfill when gas prices skyrocketed. This prompted the customers to file lawsuits against LoVaca totaling $1.6 billion. Greehey spent the next six years negotiating a settlement and working to make the company profitable again.

Finally, a settlement was reached in December 1979, which included a spin-off of LoVaca, severing all ties with Coastal. From that spin-off, Valero Energy Corporation was born on January 2, 1980 with headquarters in San Antonio and Greehey at the helm. He was elected chairman of the board of directors in 1983.

From the beginning, Greehey focused his energies on making Valero a diversified oil and gas entity which anticipated the country's move to cleaner burning fuels. Greehey's vision and sound business strategies have created one of the biggest economic success stories in the oil and gas industry.

VALERO TODAY

Since 1980, Valero has increased its assets more than 250 percent and is now a diversified energy company with assets of more than $2.8 billion. Valero is San Antonio's second largest publicly traded company and employs more than 1,600 people.

Valero is consistently ranked by industry experts as one of the country's most modern and efficient energy companies and has been widely recognized for its environmental initiatives. Under Greehey's leadership, the corporation invested more than $1 billion in its Corpus Christi refinery over the last five years, making it one of the most technologically advanced in the world. As a result, in April 1995 it was the first petroleum refinery ever to receive the Texas Governor's Award for Environmental Excellence.

Valero is publicly traded on the New York Stock Exchange and last year posted operating revenues of just over $3 billion with earnings of $1.10 per common share.

Valero Energy Corporation is a diversified energy company engaged in the production, transportation and marketing of environmentally clean fuels and products. The company's three core businesses are specialized refining, natural gas and natural gas liquids. Valero refines high-sulfur atmospheric residual oil into premium products, primarily reformulated gasoline, at its refinery in Corpus Christi, Texas, and markets those products. In addition, the company has an 8,000-mile network of natural gas transmission and gathering lines throughout Texas; purchases natural gas for resale to distribution companies, electric utilities, other pipelines and industrial customers throughout North America; and provides gas transportation services to third parties. Valero also owns eight natural gas processing plants and is a major producer and marketer of natural gas liquids.

CONTACT: INVESTOR AND FINANCIAL INQUIRIES:

Keith Booke, 210/246-2099 or

MEDIA INQUIRIES:

Rulaine Pittman, 210/246-2025 or

Ken Slavin, 210/826-5500, Valero Energy Corporation