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Citgo Petroleum says credit profile 'strong' as U.S. sanctions bite PDVSA
September 15, 2017 / 10:12 PM / 2 months ago

Citgo Petroleum says credit profile 'strong' as U.S. sanctions bite PDVSA

HOUSTON (Reuters) - Venezuelan state-oil firm PDVSA’s refining unit in the United States, Citgo Petroleum [PDVSAC.UL], on Friday said its credit profile remains “strong and stable,” with over $1 billion in excess open credit.

Sanctions imposed on its parent company and one of its top executives by U.S. President Donald Trump’s administration this summer have created difficulties for PDVSA and its units to get the letters of credit they need to buy some oil cargoes, Reuters reported this week, citing bankers and traders.

Some producers are now using intermediaries to shield themselves from credit risks from what is seen as a the rising chance of debt default and to avoid triggering sanctions, the sources said.

Citgo said it continues to obtain all the crude required for its 749,000-barrel-per-day refining network in the United States using more than 30 suppliers.

“The vast majority of these purchases are made through long term agreements, keeping a smaller percentage at spot basis to handle swings as result of planned turnarounds and unexpected operational events,” the company said in its statement.

Ramon Lobo, Venezuela’s finance minister and economy vice president, on Thursday said the country’s government is facing “a series of difficulties” as result of U.S. sanctions, which he considered an attempt to push the country to insolvency with a “financial blockade.”

PDVSA is trying to shift to using China’s yuan and other currencies for trade transactions instead of U.S. dollars, he said.

Meanwhile, Citgo said its Lemont, Illinois, plant continues to purchase Canadian crude through open credit terms with 15 suppliers.

“Several of these suppliers (are) even expressing their desire for additional business with Citgo,” it added.

The refiner did not say if the current sellers of Canadian oil to its refineries are producers or intermediaries.

The firm also said its financial strength allowed it to quickly prepare operations for the arrival of Hurricane Harvey in late August and to restart facilities in record time.

Reporting by Marianna Parraga, editing by G Crosse

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