PDVSA agrees to repay loan from Citgo subsidary

HOUSTON Aug 6 (Reuters) - Venezuelan state-owned oil company Petroleos de Venezuela SA (PDVSA) agreed on Thursday to begin repaying a $1-billion loan from its U.S. refining and marketing subsidiary Citgo Petroleum Corp, made in December 2007, Citgo said in a statement.

"Payments will begin this month with the goal of strengthening Citgo's financial position as a refiner and marketer of petroleum products in the United States, the Gulf of Mexico and the Caribbean," Citgo said.

U.S. refiners have been hard hit by declining demand for motor fuel in the recession and the shrinking discount for normally cheaper heavy crude, which Citgo runs at its three U.S. plants.

Citgo said through the repayment, PDVSA was "ratifying its support" of the subsidiary. (Reporting by Erwin Seba; Editing by Marguerita Choy)