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CITGO Petroleum Corporation

The US will not block the court-ordered sale of shares of Citgo Petroleum Corp.’s parent company, PDV Holding, to pay off creditors who have sought payment from the Venezuelan state. US Justice Department officials said in a letter 07 April 2023 to a court-appointed representative that the government would not take enforcement actions, paving the way for creditors such as Canadian mining company Crystallex International Corp. to collect their legal claims on the refiner’s sale. CITGO Petroleum Corp. may be up for sale after the Biden administration shifted its position and will no longer protect Venezuelan state-owned oil refiner CITGO from seizure and sale to satisfy creditors. Businesses that once partnered with Venezuela, including gold mining venture Crystallex, have targeted CITGO as the only valuable state asset they can seize through the U.S. court system as compensation for billions of dollars in unpaid claims.

The U.S. gave control of CITGO to Venezuelan opposition leaders in 2019 as part of a pressure campaign against the country’s president, Nicolás Maduro, while imposing sanctions that prohibited creditors from foreclosing on the company, the report said. Any change in CITGO’s control requires a license from the Treasury Department’s Office of Foreign Assets Control (OFAC).

Venezuela's permanent mission to the United Nations (UN) denounced the US move to seize Citgo, a subsidiary of Petróleos de Venezuela S.A. (PDVSA) 02 May 2023 before the UN Economic and Social Council. Venezuela's alternate permanent representative to the UN, Joaquín Pérez Ayestarán said that "unilateral coercive measures and the pretension to confiscate national assets, such as the company Citgo, constitute the maximum expression of corruption, and represent criminal actions and double standards in the fight against this scourge." His statements came within the framework of the UN Economic and Social Council meeting on Sustainable Development Goal (SDG) 16. The permanent mission to the UN, noted that Venezuela seeks to "improve governance and fight corruption, reaffirming the national commitment to transparency, multilateralism and popular organization as the essence of the fight against corruption."

On 04 May 2023, the Bolivarian Alliance for the Peoples of Our America - Peoples' Trade Treaty (ALBA-TCP) described as "immoral and illegal" the decision of the U.S. Treasury Department that will allow the auction of CITGO, the U.S.-based subsidiary of the Venezuelan state oil company PDVSA. "The U.S. government intends to expropriate CITGO through the illegitimate license 42, issued by the U.S. Treasury Department," the ALBA said. "This new aggression against the Venezuelan government and people is a consequence of the U.S. unilateral coercive measures, which threaten the country' sovereignty," it added.

CITGO purchases approximately one-half of its crude oil requirements from Petroleos de Venezuela, S.A., the national oil company of the Bolivarian Republic of Venezuela and CITGO's ultimate parent corporation, under long-term supply agreements. CITGO Petroleum Corporation ("CITGO" or the "Company") and its subsidiaries are engaged in the refining, marketing and transportation of petroleum products including gasoline, diesel fuel, jet fuel, petrochemicals, lubricants, asphalt and refined waxes, mainly within the continental United States east of the Rocky Mountains. The Company does not own any crude oil reserves or crude oil exploration or production facilities. It operates as a single segment. It is an indirect wholly owned subsidiary of Petroleos de Venezuela, S.A. ("PDVSA", which may also be used herein to refer to one or more of its subsidiaries), the national oil company of the Bolivarian Republic of Venezuela.

The story of CITGO Petroleum Corporation as an enduring American success story began back in 1910 when pioneer oilman, Henry L. Dougherty, created the Cities Service Company. When Cities Service determined that it needed to change its marketing brand, it introduced the name CITGO in 1965, retaining the first syllable of its long-standing name and ending with "GO" to imply power, energy and progressiveness. The now familiar and enduring CITGO "trimark" logo was born.

Occidental Petroleum bought Cities Service in 1982, and CITGO was incorporated as a wholly owned refining, marketing and transportation subsidiary in the spring of the following year. Then, in August 1983, CITGO was sold to The Southland Corporation to provide an assured supply of gasoline to Southland's 7-Eleven convenience store chain.

In September, 1986, Southland sold a 50 percent interest in CITGO to Petróleos de Venezuela, S.A. (PDVSA), the national oil company of the Bolivarian Republic of Venezuela. PDVSA acquired the remaining half of CITGO in January, 1990. With a secure and ample supply of crude oil, CITGO quickly became a major force in the energy arena.

London has Big Ben, Paris has the Eiffel Tower. Boston has the CITGO sign. Ever since 1965, the CITGO sign has held a place deep in the hearts of Boston residents. Photographs of the sign appear on postcards, in newspapers, movies, books, tourism brochures and even in Life magazine. During the day, the CITGO sign sits impressively on its perch in Kenmore Square. At night, its pulsing red, blue and white neon are visible for miles around. Red Sox fans can't see past left field at Fenway Park without taking in the majestic sign. CITGO decided to dismantle the deteriorating sign in 1983, but the people of Boston came to its rescue. Claiming the sign was an excellent example of urban neon art, and as Boston as baked beans, they stopped the demolition crew. Groups fought to have the sign declared a landmark. It quickly became clear Bostonians were fond of their sign. CITGO refurbished the sign and, with the flip of a switch, Kenmore Square was bright again in the night sky.

On 28 August 2005 it was reported that President Hugo Chavez offered gasoline and heating fuel at low and affordable prices to the poor and needy in the US. Chavez said that he will be apportion 1.5 million barrels of oil daily at 40% less than market price through the Venezuelan government owned Citgo in the US. Citgo will refine the oil into gasoline and heating fuel and make it available to the unemployed, the poor and old folks who find it difficult to heat their homes in the winter.

The program provided assistance to 200,000 households in 2008, including 220 tribal communities in 13 states. Income-eligible households received up to 100 gallons of heating oil; most tribes received direct grants from CITGO, which also provided heating grants to over 210 homeless shelters in 14 states.

Houston-based CITGO Petroleum Corp., an indirect subsidiary of PDV Holding Inc., Houston, operates three U.S. refineries, in Lake Charles, La.; Lemont, Ill.; and Corpus Christi, Texas, and wholly or jointly owns 38 active terminals, six pipelines and more. With approximately 3,300 employees and a combined crude capacity of approximately 769,000 barrels-per-day (bpd), CITGO is the fifth-largest independent refiner in the United States. Citgo operates a refinery in Lake Charles, Louisiana. The company ships foreign crude oil to the refinery, performs refining operations on it, and sells the refined products in the United States and abroad. Not all of the refined products leave the refinery, however. After the crude oil goes through the first refining stage, some of the resulting product is used to fuel the refinery itself.

In November 2017, six U.S. oil executives known as the “Citgo 6” were called to a meeting in Caracas at PDVSA, the state-run parent company that owns Citgo. Masked security agents took them into custody at the meeting. Five of the men are dual U.S.-Venezuelan citizens. The sixth is a U.S. lawful permanent resident. All work in the U.S., where Citgo is headquartered and has offices. The Maduro regime then placed the six “in a Venezuelan military prison in deplorable conditions,” according to the State Department’s Elliott Abrams. They were left in windowless cells and developed “cumulative health problems given their lack of consistent access to food, sunlight and exercise.” After they were officially charged in January 2018, the Venezuelan authorities — under Maduro’s direction — scheduled and cancelled 18 hearings. In July 2019, Venezuelan authorities agreed to move the case out of the pre-trial phase. However, the first trial hearing, scheduled for December, was also cancelled.

Speculation grew in March 2022 over a potential thaw between the United States and Venezuela after the South American country released from prison two Americans, including a former executive of oil giant CITGO. This came days after a high-level US delegation met with Maduro.