May 31, 2010 / 6:02 PM / 9 years ago

UPDATE 1-Valero says Aruba oks refinery tax settlement deal

* Valero to pay government 200 million Afl.

* Valero also to pay a minimum tax of $10 million per year

By Janet McGurty

TORONTO, May 31 (Reuters) - Aruba approved a tax settlement deal on Saturday for Valero Energy Corp’s (VLO.N) idled 235,000 barrel per day refinery on the Caribbean island, a company spokesman said on Monday.

The agreement leads the way to resolve all tax issues pertaining to the Valero Aruba Refinery, and as Valero considers strategic alternatives for the plant, a settlement will help make the refinery more viable for Valero and for any future buyer.

“This gives clarity to the cost structure and an idea for potential future costs. It may lead to some decision making,” said Bill Day, a spokesman for the company.

Under the terms of the settlement, Valero would pay the government 200 million Aruba florin and make a minimum tax payment of $10 million per year.

The refinery was shut in July due to financial losses caused by the poor economy, the narrow price differential between heavy sour and light sweet crude oils, and the disputed issues.

Valero has kept all employees on the payroll until the June 1 deadline for the Parliament to approve the settlement.

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