Venezuela Offers $5 Million to Aid Harvey Victims Via Citgo

  • Aid offer comes after Venezuela was hit with U.S. sanctions
  • Sanctions now prevent Citgo from sending dividends back home

Hurricane Harvey Pummels Houston Area With Floods

Venezuela, still reeling from a fresh round of U.S. sanctions that make it harder to raise financing in capital markets, offered $5 million to help victims of Hurricane Harvey in parts of Texas through its subsidiary Citgo Petroleum Corp.

Citgo, which operates the Corpus Christi Refinery with a capacity to process 157,000 barrels a day, will provide the aid to affected families through local mayors and allot a percentage of gasoline revenue to the construction of homes and shelters in and around Houston, Foreign Minister Jorge Arreaza said on state television.

People wade through chest deep water down Pine Cliff Drive as Addicks Reservoir nears capacity due to near constant rain from Tropical Storm Harvey, Tuesday, Aug. 29, 2017 in Houston. (Michael Ciaglo/Houston Chronicle via AP)

People wade through chest deep water down Pine Cliff Drive as Addicks Reservoir nears capacity in Houston on Aug. 29, 2017.

Photographer: Michael Ciaglo/Houston Chronicle via AP Photo

“We express our solidarity with the Americans affected by the hurricane,” Arreaza said, flanked by Nelson Martinez, the head of state-run oil company PDVSA. “When an American fills his tank at a Citgo gas station, he’ll be contributing to the rebuilding of the affected communities.”

It’s not the first time that Venezuela has offered aid to downtrodden U.S. communities. Former President Hugo Chavez established an annual program in 2005 to supply subsidized heating oil to lower-income homes in the United States via Citgo. The plan has been largely phased out in recent years after oil prices crashed and Chavez’s successor Nicolas Maduro fended off street protests and an economic crisis.

Citgo says on its website that the program began in the aftermath of hurricanes Katrina and Rita and has helped more than 1.8 million people through 2014.

Trucks make their way through flood waters on a main road leading to the Arkema Inc. chemical plant that was in crisis during the aftermath of Hurricane Harvey on August 30, 2017 in Crosby, Texas.
After pouring  record rains on Texas, Tropical Storm Harvey made a second landfall Wednesday to strike Louisiana, a state that still bears deep scars from 2005's Hurricane Katrina. / AFP PHOTO / Brendan Smialowski        (Photo credit should read BRENDAN SMIALOWSKI/AFP/Getty Images)

Trucks make their way through flood waters in Crosby, Texas on Aug. 30.

Photographer: Brendan Smialowski/AFP via Getty Images

While it may seem odd for Venezuela to be offering aid at a time when the government’s international reserves are near a 15-year-low with looming debt payments in the coming months, part of the U.S. sanctions announced last week now prohibit any dividends from Citgo to be sent back to Caracas.

— With assistance by Andrew Rosati

    Before it's here, it's on the Bloomberg Terminal.