Thread: Citgo considers cutting back on gas stations

Citgo considers cutting back on gas stations
U.S. arm of Venezuela’s oil company ponders move in light of refinery sales

Updated: 10:42 a.m. MT May 17, 2006
LA JOLLA, Calif. - Citgo, the U.S. refining and marketing arm of Venezuela’s state oil company, PDVSA, is considering cutting back on its 14,000-plus gas stations in the United States following the expected sale of some of its refining capacity, Citgo’s chief executive said.

“We are going to do an optimization of our marketing network,” Felix Rodriguez said late Tuesday on the sidelines of an industry event.

Citgo has announced plans to sell up to a quarter of its 865,000 barrels per day U.S. refining network as part of what the company calls an 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 barrels per day 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 their 265,000 barrel-per-day Houston refinery, in which Citgo holds a 41 percent stake. Citgo is also considering the sale of its two asphalt refineries in Georgia and New Jersey which 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.



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