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MENE GRANDE, Venezuela Aug 5 Venezuelan state
oil company PDVSA will sell North American unit Citgo Petroleum
if it receives a good offer, Petroleum Minister Rafael Ramirez
told reporters on Tuesday in what would be its 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.
"As soon as we receive a proposal that serves our interests,
we will exit Citgo," Ramirez said during a celebration of the
100th anniversary of Venezuela's oil production. "This is not
something simple like deciding to take off a jacket, this is an
issue that we're working on."
China displaced the United States as the top destination for
Venezuelan oil in 2013 and PDVSA's cashflow has been crimped as
much of the oil is used to service loans from Beijing.
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
Analysts added that Lemont, the only Citgo refinery that
does not process Venezuelan heavy crudes, may be the easiest to
sell because of its location in proximity to inexpensive
Citgo also owns a network of terminals and pipelines that
would be highly attractive as demand for energy infrastructure
rises on surging output of domestic crudes.
Separate from Citgo, PDVSA has a stake in the Chalmette
refinery in Louisiana with Exxon Mobil. The Venezuelan
company also owns the Merey Sweeny unit of the Sweeny, Texas,
refinery with Phillips66, which was spun off from
Ramirez did not directly address the possible sale of
PDVSA's other refining assets in the United States, although
bankers have said Chalmette is for sale.
But selling it or Merey Sweeny would likely lead to legal
tangles because of arbitration claims filed by Exxon Mobil
and ConocoPhillips over 2007 nationalizations of
their projects in Venezuela.
The two companies are seeking billions of dollars in
compensation through the World Bank's International Centre for
Settlement of Investment Disputes (ICSID) and the International
Chamber of Commerce (ICC).
To ensure they are compensated, the companies could ask
courts to block the sale of PDVSA's stakes in Chalmette or Merey
Ramirez said oil deliveries to the United States would be
"We are not a refining company, we are a business that
produces oil," he said. "We will always maintain supply
contracts, we are not going to pull out of our markets."
He also denied PDVSA is looking to raise cash.
"It's not that we're looking for fiscal revenue, as some
analysts say. We are fine with our fiscal revenue from oil. What
we need is to stop wasting fuel," he said.
(Reporting by Deisy Buitrago, writing by Brian Ellsworth;
Editing by David Gregorio, Terry Wade and Gunna Dickson)