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CITGO Leadership Change Coming?

U.S.-recognized opposition government in Venezuela preparing to name new team: Reuters
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UPDATE: The Trump administration on Monday imposed sanctions on PDVSA aimed at pressuring President Maduro to step down in favor of Juan Guaido. The sanctions freeze U.S.-based assets of PDVSA. CITGO will continue to operate as usual, but any money it earns will be placed in a blocked account, reported Voice of America. It will not be able to send any money to Venezuela.

Maduro said the United States is trying to "steal" CITGO from Venezuela. "I have given specific instructions to the head of PDVSA to launch political and legal action in U.S. and international courts to defend the property and assets of CITGO," he said on Venezuelan television.

“The United States is holding accountable those responsible for Venezuela’s tragic decline, and will continue to use the full suite of its diplomatic and economic tools to support Interim President Juan Guaidó, the National Assembly and the Venezuelan people’s efforts to restore their democracy,” Secretary of the Treasury Steven Mnuchin said in a press conference. “Today’s [sanctions] will help prevent further diverting of Venezuela’s assets by Maduro and preserve these assets for the people of Venezuela. The path to sanctions relief for PDVSA is through the expeditious transfer of control to the interim president or a subsequent, democratically elected government.”

PDVSA has ordered customers with tankers waiting to load Venezuelan crude bound for the United States to prepay for the cargoes or leave the ports. CITGO, San Antonio-based Valero Energy Corp. and San Ramon, Calif.-based Chevron Corp. are the three largest buyers of Venezuelan crude in the United States.

HOUSTON -- Juan Guaido, the head of the opposition-controlled congress who has proclaimed himself president of Venezuela, is considering naming a new team to lead U.S. refiner CITGO Petroleum Corp., the country’s most important foreign asset, reported Reuters. But President Nicolas Maduro said in the capital of Caracas on Jan. 25 that his government would seek to defend the refiner, raising the prospect that CITGO, run by Maduro appointees, could become a battleground between the two claimants to the politically and economically unstable country’s leadership.

Houston-based CITGO is owned by CITGO Holding Inc., a subsidiary of Venezuela’s Caracas-based state-run oil company Petroleos de Venezuela SA (PDVSA). Through CITGO’s refineries in Corpus Christi, Texas, Lake Charles, La., and Lemont, Ill., the Venezuelan government is the largest foreign owner of U.S. domestic refinery capacity. The refineries account for about 4% of domestic fuel capacity and are major suppliers of gasoline, diesel and jet fuel through a network of pipelines and terminals across 24 states. Independent CITGO-branded retail marketers sell motor fuels through about 6,000 gas stations and convenience stores in 30 states.

CITGO is preparing to block efforts for its board to be removed and its revenues diverted to an opposition government, sources close to the talks told the news agency.

"CITGO is the property of the Venezuelan state," Maduro said. The OPEC-member country plans to continue selling oil to the United States, its first destination for crude exports and PDVSA’s largest source of cash, he said.

CITGO President Asdrubal Chavez has been called to meetings in Caracas, according to those sources. He is the cousin of late President Hugo Chavez. In November 2017, Maduro had six top CITGO executives, including the acting president, arrested in Venezuela allegedly on corruption charges and installed Chavez as president of CITGO in the United States.

The U.S. Department of the Treasury on Jan. 25 issued a statement on Venezuela: “This week, President Trump recognized Juan Guaido as the interim president of Venezuela. Diplomatic and economic relations between the United States and Venezuela must be consistent with the United States’ recognition of Juan Guaido and the National Assembly. The United States will use its economic and diplomatic tools to ensure that commercial transactions by the Venezuelan government, including those involving its state-owned enterprises and international reserves, are consistent with this recognition.”

A CITGO vice president traveled to Washington earlier this month for talks on the company's future, the sources added.

"CITGO is registered in Delaware. It belongs to Venezuela, which now has two presidents. The United States only recognizes one, but that is not the one who appointed people at CITGO's board," one of the sources told Reuters.

The White House has been exploring ways to redirect oil revenues to the opposition, said the report.

In November 2018, Venezuela settled a $1.2 billion claim in a deal that prevented a creditor from gaining control of CITGO.

CITGO did not respond to a CSP Daily News request for comment by posting time.

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