Purchase expands Suncor's downstream capacity, a key step in oil sands
    growth strategy

    CALGARY, June 1 /PRNewswire-FirstCall/ - Suncor Energy Inc. announced
today that its U.S. subsidiary has expanded its refining operations by
acquiring a Valero Energy Corporation (NYSE: VLO) refinery adjacent to
Suncor's refinery in Commerce City, Colorado, just outside of Denver.
    Suncor Energy (U.S.A.) Inc. yesterday purchased the Colorado Refining
Company, an indirect wholly-owned subsidiary of Valero. The purchase price was
US$30 million (CDN$37 million) plus working capital and associated oil and
product inventory. Colorado Refining Company's principal assets are Valero's
Commerce City refinery and a products terminal located in Grand Junction,
Colorado. The purchase is not subject to regulatory approval.
    The 30,000 barrel per day (bpd) refinery is located next to Suncor's
existing refinery, which was acquired in 2003. Suncor intends to fully
integrate the two operations, providing a combined refining capacity of
approximately 90,000 bpd.
    With the purchase, Suncor is assuming Valero's 140 employees and the
existing contract with the United Steel, Paper and Forestry, Rubber,
Manufacturing, Energy, Allied Industrial and Service Workers International
(USW) Union, Local 5-477. Suncor will continue to provide refined products to
retail customers through Phillips 66 service stations in Colorado and to
commercial customers throughout the U.S. Rocky Mountain region.
    "This acquisition provides an immediate expansion of our presence in
the Rocky Mountain marketplace," said Rick George, Suncor's president and
chief executive officer. "With a capacity of 90,000 barrels per day, the
integrated operation is expected to be more competitive with refineries in
Texas and Oklahoma." Valero's chairman and chief executive officer Bill
Greehey added, "These two plants belong together under one company because
they are much stronger and have a much brighter future together than either
has individually. In addition to Suncor providing employees with compensation
and benefits programs comparable to ours, the integration of these operations
will provide greater opportunities for growth and a brighter future."
    Suncor, which operates an oil sands production facility in northern
Alberta, Canada, has long-term plans that include integrating its growing
crude oil production into the U.S. energy market through investments in
refining assets. However, local crude oil suppliers currently providing
feedstock to the Valero refinery would not be affected by the transaction.
    "With a target to increase our oil sands production to more than a
half million barrels per day, building stable access to strategic markets is
a key part of our long-term growth strategy," said George.
    Suncor will continue seeking additional downstream integration
opportunities as part of its growth strategy. Such opportunities could include
long-term contracts, joint ventures and the potential purchase of further
refining assets or the expansion of Suncor's existing assets.

    This news release contains forward-looking statements that address goals,
expectations or projections about the future. These statements are based on
Suncor's current goals, expectations, estimates, projections and assumptions,
as well as its current budgets and plans for capital expenditures. Some of the
forward-looking statements may be identified by the words "expected", "plans",
would", "target" and similar expressions. These statements are not guarantees
of future performance. Actual results could differ materially, as a result of
factors, risks and uncertainties, known and unknown, to which Suncor's
business is subject. Further discussion of the risks, uncertainties and other
factors that could affect these plans, and any actual results, is included in
Suncor's annual report to shareholders and other documents filed with
regulatory authorities.

    Suncor Energy Inc. is an integrated energy company headquartered in
Calgary, Alberta. Suncor's oil sands business, located near Fort McMurray,
Alberta, extracts and upgrades oil sands and markets refinery feedstock and
diesel fuel, while operations throughout Western Canada produce natural gas.
Suncor operates a refining and marketing business in Ontario with retail
distribution under the Sunoco brand. U.S.A. downstream assets include refining
operations in Colorado and retail sales in the Denver area under the Phillips
66 brand. Suncor's common shares (symbol: SU) are listed on the Toronto and
New York stock exchanges. Sunoco in Canada is separate and unrelated to Sunoco
in the United States, which is owned by Sunoco, Inc. of Philadelphia.

    Valero Energy Corporation is a Fortune 500 company based in San Antonio,
with approximately 20,000 employees and annual revenue of approximately
$55 billion. The company owns and operates 15 refineries throughout the
United States, Canada and the Caribbean. Valero's refineries have a combined
throughput capacity of approximately 2.5 million barrels per day, which
represents approximately 12 percent of the total U.S. refining capacity.
Valero is also one of the nation's largest retail operators with more than
4,700 retail and wholesale branded outlets in the United States, Canada and
the Caribbean under various brand names including Diamond Shamrock, Shamrock,
Ultramar, Valero, and Beacon. Please visit http://www.valero.com for more
information.


    Additional Information

    -  The Valero refinery relies primarily on domestic crude oil for
       feedstock. The 30,000 bpd capacity refinery is configured as a fuels
       refinery. It supplies about 15% of Colorado's gasoline and diesel
       fuel. The refinery is located approximately six miles (about 10 km)
       northeast of downtown Denver in Commerce City. It has been operating
       since 1937. Assets outside of the refinery include a products terminal
       located in Grand Junction, Colorado.

    -  Suncor's businesses in Canada and the United States include:
       -  the company's core oil sands business in Alberta (Suncor pioneered
          commercial crude oil production in northern Alberta's Athabasca oil
          sands in 1967)
       -  conventional natural gas production in Western Canada
       -  downstream refining, marketing and retail businesses in Ontario and
          Colorado

    -  Suncor is committed to producing hydrocarbon fuels to meet today's
       needs while supporting the development of new markets for renewable
       energy. Suncor's participation in wind power projects in Alberta and
       Saskatchewan is one part of that strategy. The projects provide about
       10% of Canada's wind-generated electricity and offset 115,000 metric
       tonnes of carbon dioxide per year.

    -  Suncor employs more than 4,500 people, with more than 700 employees
       based in the U.S.A. (including 250 employees at its retail sites).
       Suncor's President and Chief Executive Officer, Rick George, is
       originally from Brush, Colorado.

    -  Suncor's goal is to increase oil sands production to more than
       a half million barrels per day:
       -  current production capacity is expected to increase to 260,000 bpd
          by the end of 2005
       -  expansion projects are planned to further boost production capacity
          to 350,000 bpd in 2008
       -  in 2010 to 2012, the addition of a third complete upgrader is
          expected to drive Suncor's production capacity to 500,000 to
          550,000 bpd

    -  Suncor's leases contain estimated volumes of bitumen (a tar-like,
       heavy oil) sufficient to produce a potential 11 billion barrels of
       conventional quality crude oil.

    -  Suncor's growth strategy is combined with a broad vision of
       sustainability that recognizes the importance of increasing
       shareholder value, reducing environmental impacts and contributing to
       the well-being of the communities in which we operate.

    -  In 2004, Suncor contributed more than CDN$7 million to a variety of
       community and Aboriginal initiatives, as well as charitable
       organizations supported through the Suncor Energy Foundation.


    More information is available at http://www.suncor.com

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