Valero Energy Corporation (NYSE: VLO) announced today that, on Nov. 3, an arbitration panel in the Netherlands handed down an interim decision on certain issues in dispute between Valero and the Government of Aruba. The panel ruled favorably on Valero's existing exemption from income tax liability for refining operations through 2010. Two other items in the arbitration -- the applicable dividend tax rate and the turnover tax -- were not fully resolved in the panel's decision and remain subject to further review. Valero continues to believe that its remaining claims against these taxes have significant merit, and intends to vigorously pursue these claims through the arbitration proceedings and in proceedings in Aruba.

Valero had not recognized any expense or liability with respect to these matters in its consolidated financial statements or in the company's third quarter earnings release issued Oct. 27, 2009. Due to the uncertain timing of the panel's final ruling, the company has recorded a loss contingency accrual of approximately $140 million, or $(0.25) per share, in its financial results for the quarter ended Sept. 30, 2009. The accrual includes all material liabilities through Sept. 30, 2009 associated with the arbitration.

The company has filed its Form 10-Q for the quarter ended Sept. 30, 2009 and has reflected these amounts in the company's financial statements. A more detailed discussion of these matters is included in Note 14 of the company's financial statements on Form 10-Q. The company's third quarter 2009 earnings release tables have been updated to reflect this accrual. The updated tables are attached to this press release.

Valero Energy Corporation is a Fortune 500 company based in San Antonio with approximately 22,000 employees and 2008 revenues of $119 billion. The company owns and operates 16 refineries throughout the United States Canada and the Caribbean with a combined throughput capacity of approximately three million barrels per day, making it the largest refiner in North America. Valero is also a leading ethanol producer with seven ethanol plants in the Midwest with a combined capacity of 780 million gallons per year, and is one of the nation's largest retail operators with approximately 5,800 retail and branded wholesale outlets in the United States, Canada and the Caribbean under the Valero, Diamond Shamrock, Shamrock, Ultramar, and Beacon brands. Please visit www.valero.com for more information.