Washington, D.C. 20549

                                    FORM 8-K

                                 CURRENT REPORT

     Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

         Date of Report (Date of earliest event reported): July 1, 2003

                            VALERO ENERGY CORPORATION
             (Exact name of registrant as specified in its charter)

          Delaware                       1-13175                 74-1828067
(State or other jurisdiction    (Commission File Number)        (IRS Employer
      of incorporation)                                      Identification No.)

                 One Valero Place
                San Antonio, Texas                          78212
     (Address of principal executive offices)            (Zip Code)

       Registrant's telephone number, including area code: (210) 370-2000


Item 2.  Acquisition of Assets

         On May 14, 2003, Valero Energy Corporation,  its indirect, wholly owned
subsidiary,  Valero Refining-New Orleans, L.L.C., and Orion Refining Corporation
entered into an  agreement  pursuant to which  Valero  agreed to purchase  Orion
Refining  Corporation's  refinery  located  in St.  Charles  Parish,  Louisiana,
approximately 15 miles west of New Orleans. The St. Charles refinery has a total
throughput  capacity of approximately  185,000 barrels per day (bpd) and a crude
oil capacity of approximately 155,000 bpd.

         On July 1, 2003,  Valero  completed the purchase of the Orion refinery.
The purchase price for the refinery was $400 million,  plus  approximately  $145
million for refinery  hydrocarbon  inventories acquired in the transaction based
on market-related prices at the time of closing.  Consideration for the purchase
was in the form of $250 million stated value of mandatory  convertible preferred
stock and the  balance in cash.  The  convertible  preferred  stock has a stated
value of $25.00 per share and will automatically  convert to Valero common stock
in three years.

         The purchase  agreement  for the refinery  also  provides for potential
earn-out payments if agreed-upon refining margins reach a specified level during
any of the seven years following the closing.  The earn-out payments are subject
to an  annual  maximum  limit  of $50  million  and an  aggregate  limit of $175

Item 7.  Financial Statements and Exhibits.

(a)  Financial  Statements  of  business  acquired.
(b)  Pro  forma  financial information.

     The financial statements and pro forma financial information required under
     Items 7. (a) and (b) are not  included  in this report and will be filed by
     amendment no later than 60 days after the date of this report.

(c) Exhibits.

Exhibit No.       Description

2.1             Purchase and Sale Agreement dated as of May 13, 2003 among Orion
                Refining  Corporation,  Valero  Energy  Corporation  and  Valero
                Refining - New Orleans,  L.L.C as amended by the First Amendment
                to the Purchase and Sale Agreement dated as of June 13, 2003 and
                by the Second Amendment to the Purchase and Sale Agreement dated
                as of July 1, 2003  (incorporated by reference to Exhibit 2.1 to
                Valero Energy Corporation's  Registration Statement on Form S-3,
                filed on July 11, 2003 (SEC file no. 333-106949)).



         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
the  registrant  has duly caused this Current Report on Form 8-K to be signed on
its behalf by the undersigned hereunto duly authorized.

                                            VALERO ENERGY CORPORATION

                                            By:     /s/ Jay D. Browning
                                                     Jay D. Browning
                                                     Vice President and
                                                     Corporate Secretary

Dated: July 15, 2003