|“We are here to maximize the value of this product for the benefit of all Venezuelans,” said Venezuelan oil minister Rafael Ramirez.|
Photo: Venezuelanalysis.com archive.
Caracas, Venezuela. April 5, 2005 (Venezuelanalysis.com).- Venezuelan Energy and Oil Minister Rafael Ramirez, dismissed reports about the sale of Citgo Corp., a U.S. based wholly-owned subsidiary of the Venezuelan state oil company Petroleos de Venezuela (PDVSA).
While talking to reporters shortly after participating at an energy forum in Caracas, Ramirez, who also acts as president of PDVSA, said that Citgo will be restructured in order to make it more efficient, but it will not be sold.
“We have said that we are not going to get rid of Citgo. We have an important presence in the U.S. market. There are some installations that make no economic sense for Venezuela or for PDVSA,” Ramirez said.
Ramirez confirmed that they have received proposals from other companies interested in the restructuring process. According to reports, Citgo may end up selling its less profitable refineries, while keeping those that produce profits and those that process Venezuelan crude.
“We are not traders, we are a national company that produces petroleum. We are here to maximize the value of this product for the benefit of all Venezuelans,” Ramirez added.
The PDVSA president added that Citgo buys 8 billion dollars in crude oil from sources other than Venezuela in order to supply some of its refineries in the U.S.
During an interview last February, Citgo’s new CEO, Felix Rodriguez, said that “the review of Citgo’s assets hasn’t been finished, and there are many aspects to review. This is a business in which each refinery must be analyzed, up until now, we have only advanced in the evaluation of costs.”
Back in February, Ramirez told Venezuela’s daily El Universal that Citgo’s expansion plans have been placed on hold, including the acquisition of a refinery on behalf of Citgo Asphalt, until certain issues such as Pdvsa’s discounts on crude sold to Citgo, tax payments on U.S. soil, dividend repatriation, the use of Venezuelan personnel at Citgo, etc., have been fully resolved. He mentioned the existence of talks with the U.S. government regarding the possibility that Citgo could pay taxes in Venezuela.
Oil shipments to U.S. have increased
After losing about 14 billion U.S. dollars during the work stoppage and sabotage of the company that was organized by top executives who aimed at ousting President Hugo Chavez at the end of 2002, Pdvsa has been reviewing its international operations under the suspicion that the former executives made several deals driven by personal gains instead of by the company’s or country’s benefit.
Critics of Venezuelan President Chavez, argue that the scrutiny and possible sale of Citgo, is aimed at reducing the shipments of oil to the United States, in order to divert it to other markets less politically hostile towards Venezuela, such as China. However, oil shipments to the U.S. from Venezuela have actually increased. Surpassing Canada, Mexico and Saudi Arabia; Venezuela was the largest supplier of crude oil to the U.S. during the month of December 2004, according to Oil Daily report issued February 15.
The US Energy Information Administration (EIA) crude import data, released early February, shows Venezuela ending the year with 1.292 million b/d. By adding the 307,000 b/d delivered to the US Virgin Islands, through its refining joint venture facility with Amerada Hess in St Croix, which the EIA does not count for administrative reasons, Venezuela totaled 1.599 million b/d, surpassing Canada with 1.563 million b/d, Mexico with 1.552 million b/d and Saudi Arabia with 1.449 million b/d. Venezuela also landed 237,000 b/d of oil-related products to the US in December.
Chavez has denounced that the U.S. government is seeking to remove him from power, and threatened to cut oil shipments if the U.S. attempts to impose sanctions on Venezuela, or tries to invade the country.