Citgo quarterly profit jumps on boost from higher refining capacity
Citgo Petroleum Corp, the U.S. refining unit of Venezuelan state-owned oil company PDVSA, reported a 76.2% rise in profit for the third quarter, compared with the second, benefiting from increased capacity.
Total refinery throughput in the latest reported quarter increased 14.3% to 825,000 barrels per day (bpd) from the preceding quarter, with utilizing rate of 94%.
The eighth-largest U.S. refiner by capacity ousted its chief and other top executives earlier this year and severed dealings with PDVSA after Washington levied sanctions intended to force socialist President Nicolas Maduro from office.
Some PDVSA creditors expect Citgo to help pay off PDVSA debts that have Citgo shares as collateral. Creditor court actions are threatening the refiner’s assets since the parent company’s bonds defaulted earlier this year.
But Citgo has preferred to reinvest as much as it can to maintain and update its three refineries, a task former executives of the company say it is needed as PDVSA demanded most of Citgo’s available cash in recent years.
Since its debt covenants stopped Citgo in 2015 from repatriating dividends, the refiner has reinvested a portion of quarterly profits and another portion has been transferred to Citgo Holding, an entity between Citgo and PDVSA, to pay debt the unit acquired on behalf of the parent company that year.
The U.S. Treasury has temporarily barred efforts to seize Citgo shares and other assets for repayment of PDVSA debt.
Citgo Petroleum’s net income jumped to $215 million in the third quarter from $122 million in the second.
Reporting by Gary McWilliams and Marianna Parraga in Houston and Arundhati Sarkar in Bengaluru; Editing by Maju Samuel
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