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

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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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