Venezuela's Citgo Expected to End up in US Refiner Hands

Venezuela’s Houston based Citgo Petroleum will end up in the hands of one or more of the largest refiners operating in the US according to Reuters sources as creditors seek to have long-standing debts repaid by the company.

• Citgo is the seventh-largest refiner in the United States with a total capacity topping 800,000 barrels daily. The auction for its assets is set to start this week.
• Citgo’s ultimate parent is Venezuela’s state-owned PDVSA. The US has protected the company from creditors for four years though Venezuela has not been allowed to materially gain form the company because of sanctions.
• It was thought that easing of US sanctions last week may have allowed PDVSA to regain control and pay back creditors and end the lawsuit but Reuters sources said it should not affect this week’s auction.
• Few companies are expected to be able to bid for the entire business of three refineries, six pipelines, and 4,200 independent gasoline retailers.
• Bidders are expected to include Marathon Petroleum, Saudi-owned Motiva Enterprises, Valero Energy and Koch Industries.
• Venezuelan opposition government would like to see the refiner remain in Venezuelan hands to try and secure its economic future but Venezuelan President Maduro’s grip on power has led to numerous complications for its future.
• The sale could end up being the highest ever auction sale in history according to reports.