By PIETRO D. PITTS and ANATOLY KURMANAEV
Petroleos de Venezuela SA, the Latin American nations
state-owned crude producer, said the US oil refining
and marketing assets
its seeking to sell are worth more than $10 billion.
Their value is much, much more, Rafael Ramirez,
president of the oil producer known as PdVSA, told reporters.
He said the company is receiving offers for assets of
Houston-based Citgo Petroleum, without providing details on
the value of the bids.
Citgo owns three refineries capable of handling about 749,000
bpd in Louisiana, Texas and Illinois. It also operates the
sixth-largest US retail gasoline chain through about 5,900
branded stations, according to the Arlington, Virginia-based
National Association of Convenience Stores.
Argus Media reported July 24 that the government has received
offers in the range of $10 billion to $15 billion for the
We are not a refining
company, were an
oil-producing company, Ramirez said at an event marking
100 years of Venezuelan crude production in the western state
of Zulia. Citgo said in a July 29 bond prospectus document
that its parent company was exploring a sale.
Venezuela President Nicolas Maduro is seeking to sell foreign
refineries as the nation tries to raise cash, boost oil
exports to China and reduce the risk of having assets seized
if it loses international lawsuits brought by former oil
partners, GlobalSource Partners Ruth de Krivoy and
Tamara Herrera said in an July 31 e-mailed report to clients.
Our situation is not like many analysts have said,
claiming that we need fiscal revenues, Ramirez said.
We are doing well with our fiscal revenues from the oil
Citgo had sales of $42.3 billion last year and earnings
before interest, taxes, depreciation and amortization of $1.8
billion, according to the bond prospectus.
The refining business is very strong, especially in the
Midwest, where there is a lot of gasoline consumption, Oil
Outlooks and Opinions president Carl Larry said in an
interview from Houston. The refining business may be sold
separately from the gasoline stations, he said.
The CEOs of refining
companies PBF Energy and
HollyFrontier have said in recent days they would look at
Buying the refineries would be a big bite for
HollyFrontier, CEO Mike Jennings said on a company conference
call. But we look at all these types of opportunities,
particularly those with an inland crude supply
PBFs Thomas OMalley said Aug. 1 that the assets
were certainly something that we would follow up
The head of Marathon Petroleum said last week his company was
pretty satisfied with our footprint and Phillips
66s CEO said hes more focused on investing in
midstream and chemicals businesses.
Venezuela is Latin Americas biggest oil exporter,
shipping 1.8 million bpd in 2013, according to the BP
Statistical Review of World Energy.
Maduro has spent revenue from exports on social programs
created by predecessor Hugo Chavez and debt repayments,
pushing the countrys public sector deficit to 12.3% of
gross domestic product last year, according to Barclays.
Contract disputes and expropriations have been filed at the
International Centre for Settlement of Investment Disputes
and the International Chamber of Commerces Court of
Arbitration by mining and oil companies that operated in the
country including ExxonMobil, Gold Reserve, Phillips 66 and
With takeovers of Exxon and ConocoPhillips upgraders,
these assets could be potentially taken to satisfy an
arbitration ruling against them, said Andy Lipow,
president of Houston-based energy consultant Lipow Oil