Ownership Submission
FORM 4
Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP OF SECURITIES

Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934, Section 17(a) of the Public Utility Holding Company Act of 1935 or Section 30(h) of the Investment Company Act of 1940
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(Print or Type Responses)
1. Name and Address of Reporting Person *
GREEHEY WILLIAM E
  2. Issuer Name and Ticker or Trading Symbol
VALERO ENERGY CORP/TX [VLO]
5. Relationship of Reporting Person(s) to Issuer
(Check all applicable)
_____ Director _____ 10% Owner
__X__ Officer (give title below) _____ Other (specify below)
COB
(Last)
(First)
(Middle)
P.O. BOX 696000
3. Date of Earliest Transaction (Month/Day/Year)
12/30/2005
(Street)

SAN ANTONIO, TX 78269-6000
4. If Amendment, Date Original Filed(Month/Day/Year)
6. Individual or Joint/Group Filing(Check Applicable Line)
_X_ Form filed by One Reporting Person
___ Form filed by More than One Reporting Person
(City)
(State)
(Zip)
Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned
1.Title of Security
(Instr. 3)
2. Transaction Date (Month/Day/Year) 2A. Deemed Execution Date, if any (Month/Day/Year) 3. Transaction Code
(Instr. 8)
4. Securities Acquired (A) or Disposed of (D)
(Instr. 3, 4 and 5)
5. Amount of Securities Beneficially Owned Following Reported Transaction(s)
(Instr. 3 and 4)
6. Ownership Form: Direct (D) or Indirect (I)
(Instr. 4)
7. Nature of Indirect Beneficial Ownership
(Instr. 4)
Code V Amount (A) or (D) Price
Common Stock, $.01 par value 12/30/2005   M   74,666 (1) A $ 0 5,535,262 D  
Common Stock, $.01 par value 12/30/2005   M   73,332 (1) A $ 0 5,608,594 D  
Common Stock, $.01 par value 01/03/2006   A   374 (2) A $ 0 5,608,968 D  
Common Stock, $.01 par value 01/03/2006   F   1,568,942 D $ 53.515 4,040,026 (3) D  

Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.
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Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned
(e.g., puts, calls, warrants, options, convertible securities)
1. Title of Derivative Security
(Instr. 3)
2. Conversion or Exercise Price of Derivative Security 3. Transaction Date (Month/Day/Year) 3A. Deemed Execution Date, if any (Month/Day/Year) 4. Transaction Code
(Instr. 8)
5. Number of Derivative Securities Acquired (A) or Disposed of (D)
(Instr. 3, 4, and 5)
6. Date Exercisable and Expiration Date
(Month/Day/Year)
7. Title and Amount of Underlying Securities
(Instr. 3 and 4)
8. Price of Derivative Security
(Instr. 5)
9. Number of Derivative Securities Beneficially Owned Following Reported Transaction(s)
(Instr. 4)
10. Ownership Form of Derivative Security: Direct (D) or Indirect (I)
(Instr. 4)
11. Nature of Indirect Beneficial Ownership
(Instr. 4)
Code V (A) (D) Date Exercisable Expiration Date Title Amount or Number of Shares
Common Stock, $.01 par value (1) 12/30/2005   M     74,666 12/30/2005 01/15/2007 Common Stock 74,666 $ 0 74,666 D  
Common Stock, $.01 par value (1) 12/30/2005   M     73,332 12/30/2005 02/03/2008 Common Stock 73,332 $ 0 36,668 D  
Stock Option (right to buy) $ 53.515 01/03/2006   A   5,000     (4) 01/03/2013 Common Stock 5,000 $ 0 5,000 D  

Reporting Owners

Reporting Owner Name / Address Relationships
 Director  10% Owner  Officer  Other
GREEHEY WILLIAM E
P.O. BOX 696000
SAN ANTONIO, TX 78269-6000
      COB  

Signatures

 J. Stephen Gilbert, as Attorney-in-Fact for William E. Greehey   01/04/2006
**Signature of Reporting Person Date

Explanation of Responses:

* If the form is filed by more than one reporting person, see Instruction 4(b)(v).
** Intentional misstatements or omissions of facts constitute Federal Criminal Violations. See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).
(1) Settlement of performance shares granted in 2004 and 2005 at 100% of target.
(2) Grant of restricted stock under the issuer's Restricted Stock Plan for Non-Employee Directors.
(3) The 4,040,026 amount does not include 282,367.4052 shares indirectly owned by the reporting person in benefit plans. On December 15, 2005, Valero's common stock split 2-for-1, resulting in a 2-for-1 increase in the reported shares of common stock beneficially owned by the reporting person.
(4) Grant under the issuer's Non-Employee Director Stock Option Plan. The option vests in three equal annual installments beginning 01/03/2007.

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