Valero Energy CEO Bill Klesse to retire in May
HOUSTON (Reuters) - Bill Klesse, the silver-haired chief executive officer of Valero Energy Corp (VLO.N), the largest U.S. refiner, will retire in May after eight years at the helm, the company announced on Monday.
He will be succeeded by Chief Operating Officer Joe Gorder, but remain as director and chairman, the company said.
The announcement had been expected, as Gorder was appointed to his current post in May 2012 and widely considered Klesse's heir apparent.
Klesse, 67, has spent his entire 45-year career with Valero and its predecessor companies, Diamond Shamrock and Ultramar Corp. He became Valero's CEO in 2005 and was named chairman of the board in 2007.
Gorder, 56, who has been with Valero for 27 years, has held positions including senior vice president for corporate development and strategic planning. As chief operating officer, he is responsible for refining operations and commercial operations in marketing, supply and transportation.
Under Klesse's tenure, the U.S. refining industry has faced volatile margins, the 2008 global recession, more regulation and a U.S. oil and natural gas renaissance boom that supplies cheap crude and even cheaper gas to run the plants.
More than four years ago, Valero started selling off its U.S. East Coast refineries that at the time were dependent on more expensive imported crude, focusing on plants in other markets. At the same time, Valero went into the ethanol business, buying 10 distressed ethanol plants.
As more light-sweet Texas crude headed for its U.S. Gulf Coast plants, most of which are designed to run heavy sour crude like that produced in Canada and Venezuela, Valero made adjustments.
It shelved a plan to build a coker at its 290,000 barrels-per-day (bpd) refinery in Port Arthur, Texas, which is a key unit needed to process heavy crude, and instead added units at some plants to better handle light crude.
Valero also was taking steps to receive Canadian crude via rail at other plants in addition to pipeline deliveries.
Valero added two hydrocrackers at the Port Arthur plant and at its 205,000 bpd St. Charles refinery in Norco, Louisiana, to increase diesel output and add to growing refined product exports to South America and Europe. The company also was building a $700 million petrochemical plant at the St. Charles refinery, which will make Valero one of the world's largest methanol producers.
The company has 16 refineries from California to Canada and Pembroke in southwest Wales with a cumulative capacity of 2.9 million bpd, which is about 12 percent of total U.S. refining capacity.
"Mr. Klesse successfully navigated challenging industry conditions which were marked by a major recession and significant regulatory uncertainty," Doug Terreson, an analyst for International Strategy & Investment Group, said in a note to investors on Monday. "Valero is well positioned due to his leadership and poised for strong performance, in our view."
Klesse, a colorful character with a folksy manner and a natural ease, has largely been an ambassador for the refining industry. He served as chairman of the American Fuel & Petrochemical Manufacturers, the refining and petrochemical industry's trade group, and appeared frequently before Congress to discuss issues that affect refiners.
Before being named chief operating officer nearly two years ago, Gorder was Valero's chief commercial officer and president of the company's European operations and oversaw all commercial trading.
Like Klesse, Gorder held executive positions at Diamond Shamrock and at Ultramar Diamond Shamrock after the former acquired the latter. Those posts included vice president of business development, director of commercial/industrial sales and assistant treasurer.
"We consider Joe Gorder to be well prepared for the CEO role," Simmons said.
Valero shares were up 1 percent at $48.63 in early trading on the New York Stock Exchange on Monday.
(Additional reporting by Sayantani Ghosh in Bangalore; Editing by Amanda Kwan)