| NEW YORK
NEW YORK Aug 12 Venezuelan state oil company
PDVSA is working with investment bank Lazard Ltd to sell
its North American unit, Citgo Petroleum Corp,
according to people familiar with the situation.
Venezuela's Petroleum Minister Rafael Ramirez said on Aug. 5
that the country will look to exit Citgo "as soon as we receive
a proposal that serves our interests."
A potential sale would be Venezuela's biggest pullback ever
from the U.S. refining market.
Citgo has three U.S. refineries with combined capacity of
some 750,000 barrels per day. They are in Lemont, Illinois; Lake
Charles, Louisiana; and Corpus Christi, Texas. Citgo also has 48
Representatives for Citgo and Lazard declined to comment.
The people asked not to be named because the matter is private.
Citgo's parent, PDVSA, also has a 50 percent stake in the
Chalmette refinery in Louisiana alongside Exxon Mobil Corp
, which owns the rest.
The Venezuelan oil company has tapped Deutsche Bank
separately to explore a sale of its stake in that
refinery, the people familiar with the matter said.
Exxon has also considered selling its interest in that
refinery in conjunction with PDVSA, one of the people added.
Representatives for Deutsche Bank did not immediately return
requests for comment, and Exxon Mobil declined to comment.
The Venezuelan company also owns the Merey Sweeny unit of
the Sweeny, Texas, refinery with Phillips66, which was
spun off from ConocoPhillips.
It may be difficult to find a single buyer for all of
Citgo's assets as two of the refineries are geared to run heavy
crudes from Venezuela and U.S. refining companies are trying to
maximize profits by buying cheap domestic light crudes, refinery
experts told Reuters.
Lemont, the only Citgo refinery that does not process
Venezuelan heavy crudes, would be a target for a company willing
to make a "big" bet that TransCanada's proposed
Keystone XL oil pipeline project will be approved, one of the
people said. Lemont is in close proximity to inexpensive
Canadian crudes which would flow through the Keystone pipeline.
Citgo also owns a network of 48 terminals and pipelines that
would be highly attractive, as demand for energy infrastructure
rises on surging output of domestic crudes. These assets are
also on the block, according to one person.
HollyFrontier Corp Chief Executive Michael Jennings
said on Aug. 6 that the assets of Citgo Petroleum would be "a
good fit," adding that the company always looks at merger and
(Reporting By Mike Stone, additional reporting by Jessica
Resnick-Ault; editing by Gunna Dickson)