CARACAS, Venezuela -- In an on-again, off-again sale saga, CITGO Petroleum Corp., Venezuela's U.S. oil company, has received revised bids from at least four bidders, some which have valued the company at more than $10 billion, people familiar with the matter told Reuters.
Pricing at the top range of bids and tumbling oil prices could make the cash-strapped Venezuelan government less ambiguous towards divesting CITGO, said the report. An October 26 El Universal newspaper interview with Venezuelan Finance Minister Rodolfo Marco in which he said CITGO's sale "has been ruled out" stirred confusion among interested parties.
The companies that made bids in December include Marathon Petroleum Corp., Valero Energy Corp., HollyFrontier Corp. and a consortium of TPG Capital LP and Riverstone Holdings LLC, the people familiar with the matter said. They asked not to be identified because the matter is confidential.
They said some bids came in at more than $10 billion while others were below $7 billion. CITGO declined to comment to the news agency.
CITGO's assets include three refineries, in Lemont, Ill.; Lake Charles, La.; and Corpus Christi, Texas, with combined capacity of approximately 750,000 barrels per day (bpd). It has 48 petroleum product terminals, three fully owned pipelines and six jointly owned pipelines in the United States.
Thousands of independently owned U.S. gas stations and convenience stores carry the CITGO brand at retail.
Lazard Ltd., the investment bank hired by Venezuela's state-run Petroleos de Venezuela SA (PDVSA) to explore a sale of CITGO, has not told bidders if there will be an additional round of bids, the people familiar with the matter said.
A first round of bids this fall attracted other contenders including India's Reliance Industries Ltd. and PBF Energy Inc. Those parties are no longer in the running, the people said.
Meanwhile, ConocoPhillips's bid for a court order to probe Venezuela's effort to sell CITGO Petroleum might scare off any potential investors, CITGO's lawyer said in urging a judge to reject the request.
"I'm not representing one way or the other there's a sale," John Zavitsanos, the lawyer, said at a hearing in state court in Houston this week, reported Bloomberg. "But if there is, this is going to spook off any potential buyer" because they'd "be totally freaked out about being brought into" the court case.
ConocoPhillips claims PDVSA is trying to sell CITGO, its primary U.S. holding, as part of a plan to hide the proceeds and avoid paying compensation for assets that were nationalized by former President Hugo Chavez in 2007.
ConocoPhillips asked Texas State Judge Caroline Baker to put any proceeds from the sale of CITGO under the control of a Texas court, using a state law that prohibits debtors from hiding assets.
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