Valero Refining Company-Aruba N.V., a subsidiary of Valero Energy Corporation, notified employees of the Valero Aruba Refinery that Valero has decided to further reduce operations and reorganize the site as a refined products terminal.

“We believe that Aruba has the assets to compete as a world-scale crude and refined products terminal,” said Valero Chairman and CEO Bill Klesse. “With both deepwater berths and smaller berths, the terminal will have the flexibility to load the very largest crude ships. In addition, the scale and mixture of tankage will permit commercially attractive storage opportunities for our customers. Aruba’s proximity to growing markets and its business-friendly political environment make it an ideal location for our new terminal operations.”

Terminalling activities will, however, require a considerably smaller workforce. The reorganization and reduction in workforce is expected to be complete before the end of 2012. Valero will continue to supply jet fuel, gasoline, diesel, and fuel oil to the island, as well as engage in third-party terminal services. In this terminal operations mode, Valero will continue to be a significant employer in Aruba, and will continue to invest in Aruba with facility improvements and dock and tankage upgrades.

Valero human resources representatives will begin meeting with refinery employees this week to explain the staffing selection for the terminal operations. A fair and reasonable arrangement will be presented to those employees not selected to be a part of the terminal operations. Valero will provide resources to assist in their transition to other employment.

Valero suspended refining operations at the plant in March and has maintained the refinery in a state that would allow a restart. Valero has also kept its employees on the payroll pending this decision. In the near term, the refinery will continue to be maintained in a state that would allow a restart should Valero be successful in the pursuit of alternatives for the refinery prior to the transition to terminal operations.

“We will continue to work with Prime Minister Eman and his government in this effort,” Klesse said. “Our discussions with interested parties, including those facilitated by the Government of Aruba, will continue, and if successful may result in the suspension of the workforce reduction. We greatly appreciate the continued efforts and support from the Prime Minister and his government.”

To see the Aruba refinery site