EXHIBIT 99.1


VALERO ENERGY CORPORATION COMPLETES MERGER WITH PREMCOR INC., CREATING THE
LARGEST REFINING COMPANY IN NORTH AMERICA

Thursday September 1, 9:00 am ET

SAN ANTONIO--(BUSINESS WIRE)--Sept. 1, 2005--Valero Energy Corporation (NYSE:VLO
- News) and Premcor Inc. (NYSE:PCO - News) closed on their merger at 9:00 a.m.
ET today, making Valero the largest refining company in North America.

"This acquisition represents yet another well timed and executed transaction
that should create tremendous value for our shareholders," said Bill Greehey,
Valero's chairman of the board and CEO. "With the addition of Premcor's four
refineries, which we bought for significantly less than their replacement cost,
we have improved our leverage to product margins and further enhanced our sour
crude processing capabilities. As I have often said, we are in a new era for
refining where I believe you will continue to see higher highs and higher lows
for both product margins and sour crude discounts. And now with 18 refineries,
no one is better positioned to benefit from this than Valero.

"When we first announced the transaction back in April, we obviously thought it
was a great acquisition but now, four months later, it's looking even better.
The product margin environment has continued to strengthen and sour crude
discounts have continued to widen. And, by closing four months earlier than we
originally anticipated, we will be able to capture the accretion to earnings
from the acquisition that much sooner," he said.

"Now that the transaction is complete, our top priority is to quickly integrate
the new refineries into our system. As we've said consistently, these four
refineries are very strategic for us and we are committed to enhancing their
profitability by capturing synergies with our existing refineries, improving
reliability as we have done with our previous acquisitions and increasing light
product yields. Our track record of successful integration and reliability
improvement speaks for itself. I am confident this transaction will be no
different.

"2005 is clearly going to be another record year for Valero and the outlook for
2006 is even better, particularly when you consider the contribution of the
Premcor assets, which most of the analysts have not yet factored into next
year's earnings estimates," said Greehey.

The company also noted that, as a result of closing the transaction on September
1 rather than January 1 as originally projected, the company will initially
record Premcor's crude oil and refined product inventories at their September 1
market values under purchase accounting rules. During the remainder of the year,
Valero will then apply LIFO accounting rules, which require these values to be
adjusted to their year-to-date average purchase prices. Because these
year-to-date average prices are substantially lower than current market values,
LIFO accounting will result in a charge to expense in the company's third
quarter income statement. Based on current inventory prices for crude oil and
refined products, the company estimates a one-time, non-cash LIFO pre-tax charge
would be taken in the third quarter of around $600 million, or $1.40 per share
after tax. If prices decline in the fourth quarter, LIFO accounting will result
in recovery of a portion of this charge.

"Both strategically and financially, this deal will position Valero for
continued earnings growth. We have always focused on creating shareholder value
by being a financially strong growth company. We have taken our next big step
with this acquisition. And looking to the future, we will continue to look for
both internal and external opportunities to grow our business," said Greehey.

Valero Energy Corporation is a Fortune 500 company based in San Antonio, with
approximately 22,000 employees and annual revenue of about $70 billion. The
company owns and operates 18 refineries throughout the United States, Canada and
the Caribbean with a combined throughput capacity of approximately 3.3 million
barrels per day, making it the largest refiner in North America. Valero is also
one of the nation's largest retail operators with more than 4,700 retail and
branded wholesale outlets in the United States, Canada and the Caribbean under
various brand names including Valero, Diamond Shamrock, Shamrock, Ultramar, and
Beacon. Please visit www.valero.com for more information.

Statements contained in this press release that state the company's or
management's expectations or predictions of the future are forward-looking
statements intended to be covered by the safe harbor provisions of the
Securities Act of 1933 and the Securities Exchange Act of 1934. The words
"believe," "expect," "should," "estimates," and other similar expressions
identify forward-looking statements. It is important to note that actual results
could differ materially from those projected in such forward-looking statements.
For more information concerning factors that could cause actual results to
differ from those expressed or forecast, see the proxy statement/prospectus
dated July 13, 2005 regarding the proposed merger of Valero and Premcor, and the
amended Form S-4 Registration Statement filed with the Securities and Exchange
Commission (as the same may be supplemented or amended). Also see both
companies' reports, including annual reports on Form 10-K and quarterly reports
on Form 10-Q, filed with the Securities and Exchange Commission and available on
the Valero web site at www.valero.com.

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Contact:

 Valero Energy Corporation, San Antonio
 Investors, Eric Fisher, Vice President,
 Investor Relations: 210-345-2896
 or
 Media, Mary Rose Brown, Senior Vice President,
 Corporate Communications: 210-345-2314
 Web site: http://www.valero.com/