Venezuela Oil Producer's $8 Billion U.S. Assets at Risk in Probe

  • Probe could jeopardize refineries, terminals, pipelines
  • U.S. refineries owned by PDVSA process 749,000 barrels/day

A U.S. investigation of Venezuela’s national oil producer could jeopardize about $8 billion in crude refineries, storage terminals and pipeline networks.

Three U.S. oil refineries owned by Petroleos de Venezuela SA’s Citgo subsidiary have a combined capacity to process 749,000 barrels of oil a day. The company’s largest asset is its 425,000-barrel-a-day refinery in Lake Charles, Louisiana, which includes shipping docks and storage terminals.

Citgo probably would be valued around $8 billion, said Gurpal Dosanjh, an analyst at Bloomberg Intelligence. Most of that value -- about $6 billion -- rests in the company’s pipeline and storage network, and the remaining $2 billion represents the trio of refineries, he said. Citgo valued its assets at $8.1 billion in a July 2014 bond offering. Fernando Garay, a spokesman for Citgo in Houston, couldn’t be reached for comment on the valuation.

PDVSA, as the Venezuelan parent company is known, is being probed by U.S. authorities over whether it was involved in billions of dollars of kickbacks and other schemes, the Wall Street Journal reported on Thursday. The inquiries, which are ongoing across multiple jurisdictions within the U.S., also are trying to determine whether PDVSA and its foreign bank accounts were used for other illegal purposes, the newspaper reported, citing people it didn’t identify.

‘Big Media’

Rafael Ramirez, PDVSA’s former president, said on his Twitter account that “the enemies of the people” are attacking his name “with their big media.”

Abraham Ortega, a finance executive at PDVSA, and an official at the company’s press office in Caracas didn’t reply to phone and e-mail messages seeking comment on the allegations.

Citgo’s next-largest plant processes 167,000 barrels a day near Chicago, in Lemont, Illinois. Citgo also owns a 157,000-barrel-a-day facility in Corpus Christi, Texas, that was specifically designed to handle Venezuela’s thick, high-sulfur crude.

Citgo owns 48 terminals to store crude, gasoline and other products from the Gulf Coast to the Great Lakes to New England, as well as three pipeline networks in Texas and Louisiana that carry crude and refined products. It also operates three lubricant plants in Illinois, Oklahoma and Georgia.

Filling stations and convenience stores that carry the Citgo brand are all independently owned, according to the company’s website.

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