LA JOLLA, Calif. -- CITGO, the U.S. refining and marketing arm of Venezuela's state oil company, Petroleos de Venezuela SA (PDVSA), is considering cutting back on its more than 14,000 gas stations in the United States following the expected sale of some of its refining capacity, CITGO's CEO said, according to a Reuters report.
We are going to do an optimization of our marketing network, Felix Rodriguez said. CITGO has announced plans to sell up to a quarter of its 865,000-barrels per day (bpd) U.S. refining network as part of what the company calls an [image-nocss] asset-rationalization plan.
The refinery sales will leave CITGO even shorter of refined products for its retail network. Venezuelan officials have criticized PDVSA's involvement in trading activities, saying PDVSA and CITGO should narrow their focus to bringing Venezuelan crude oil to market.
To meet its commitments to retailers, CITGO currently purchases some 100,000 bpd of refined products, on top of purchases from PDVSA's other Western Hemisphere refineries in Venezuela, the Caribbean and the U.S. Gulf Coast, Rodriguez said.
CITGO and partner Lyondell have put up for sale Lyondell-CITGO Refining LP (LCR), their 265,000-bpd Houston refinery, in which CITGO holds a 41.25% stake. CITGO is also considering the sale of its two asphalt refineries in Georgia and New Jersey that account for another 112,000 bpd of refining capacity.
The shrinking of CITGO has prompted speculation that Venezuela is looking to dispose of its U.S. refining capacity as part of a broader plan to shift its oil sales to other markets such as China.
CITGO is not selling [all of] its refineries in the United States. We intend to stay here, Rodriguez said, reiterating what other Venezuelan officials have said in recent weeks. In early April, he said, CITGO will continue to supply its customers with the top-quality products for which our brand is known. We are not selling our wholly owned refineries or other strategic assets.
Houston-based CITGO is a refiner, transporter and marketer of transportation fuels, lubricants, petrochemicals, refined waxes, asphalt and other industrial products, with annual revenues of approximately $25 billion. It operates fuels refineries in Lake Charles, La.; Corpus Christi, Texas; and Lemont, Ill.; and asphalt refineries in Paulsboro, N.J. and Savannah, Ga.
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