Company News

Is Russia Poised to Take Control of CITGO?

Russian oil company Rosneft stands to benefit if PDVSA defaults on loan

WASHINGTON -- Russia could take control of CITGO Petroleum Corp. and possibly gain the ability to affect U.S. retail gasoline prices if Petroleos de Venezuela SA (PDVSA) defaults on a loan from Russian oil company Rosneft.

Venezuela is experiencing a severe economic crisis. Last year, state-owned PDVSA used 49.9% of CITGO shares as collateral for a $1.5 billion loan from Moscow-based Rosneft. If the Venezuelan government defaults, the Russian government could become the second largest foreign owner of U.S. domestic refinery capacity and possibly affect U.S. fuel prices, lawmakers said in letters to U.S. Treasury Secretary Steven Mnuchin.

CITGO, based in Houston, is a refiner, transporter and marketer of transportation fuels owned by CITGO Holding Inc., an indirect wholly owned subsidiary of PDVSA, the national oil company of the Bolivarian Republic of Venezuela. Through CITGO, the Venezuelan government is the largest foreign owner of U.S. domestic refinery capacity. It owns three U.S. refineries (in Texas, Louisiana and Illinois) and a large network of pipelines and terminals across 24 states.

Independent CITGO-branded retail marketers sell motor fuels through approximately 6,000 gas stations and convenience stores in 30 states.

In the letters, U.S. representatives Jeff Duncan (R-S.C.) and Albio Sires (D-N.J.) and U.S. senators Bill Cassidy (R-La.), Marco Rubio (R-Fla.), Bob Menendez (D-N.J.), John Cornyn (R-Texas), Dick Durbin (D-Ill.) and Ted Cruz (R-Texas) requested that the Committee on Foreign Investment in the United States (CFIUS) review the matter.

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