Has Citgo become a political tool for Hugo Chávez?
By David J. Lynch, USA TODAY
HOUSTON — From the glass-walled building and manicured lawn to the security guard who greets visitors in a cheerful Texas drawl, everything at Citgo Petroleum seems perfectly ordinary.

Motorists pump gas at a Citgo gas station in October. Chavez could destroy the U.S. economy in 90 days, an energy banker said.
By Tim Boyle, Getty Images

But in fact there's nothing ordinary about Citgo. One of the USA's largest refiners, Citgo is a subsidiary of Venezuela's state-owned oil company, Petroleos de Venezuela S.A. (PDVSA). As such, it ultimately belongs to Venezuelan President Hugo Chávez, an avowedly anti-American leader who counts Fidel Castro among his closest friends and mocks President Bush as a "genocidal murderer."

The question of Chávez's influence over Citgo was highlighted by the company's recent provision of 25 million gallons of subsidized home-heating oil to poor people in the northeast USA. More than 100,000 households in four states should eventually benefit from the low-cost heating aid.

But some worry that Venezuela's ownership of more than 6% of U.S. refinery capacity gives Chávez, a former paratrooper given to wearing red berets and military fatigues, the power to cripple as well as comfort.

As Hurricanes Katrina and Rita demonstrated, any disruption to the nation's refining industry instantly increases gas prices. What if Chávez, who periodically threatens to curtail oil shipments to the USA, closed Citgo's refineries?

"He'd only have to do that for 90 days, and he'd destroy our economy," worries Matthew Simmons, a prominent energy investment banker. "He actually has our livelihood in his hands."

Others note that imported oil from elsewhere eventually could compensate for any interruption in Citgo supplies. And, because Chávez depends on the company's specialized refineries to process Venezuela's sulfur-rich crude oil, a shutdown would cost him and his country dearly.

"His capacity to make life difficult for George Bush would be at the cost of burying himself," says Claudio Loser, a former International Monetary Fund official.

Late last year, as winter's first chill sent consumers reaching for their thermostats, a dozen U.S. senators asked 10 major oil companies to donate a portion of their record profits to help the poor. Only Citgo responded, dispatching tankers to housing projects in New York and Massachusetts in what Felix Rodriguez, the company president and chief executive, called a purely "humanitarian" gesture.

Today, the program expands to homeless shelters and Native American tribes in Maine. Friday, Rhode Island gets its initial delivery.

Many analysts, however, saw the move as a stunt by Chávez aimed at embarrassing the Bush administration. And some say Citgo's generosity — likely to cost it more than $20 million — suggests the company may be turning into a political tool for Chávez.

"It has had a turn for the worse, perhaps the much worse. ... Now it's a different entity. It's not completely run like a business," says Antonio Szabo, a former PDVSA official and the president of Stone Bond Technologies, a Houston energy software firm.

Citgo executives say the company, founded in 1910 as Cities Service Co., is solidly profitable and can afford to offer the poor 40% discounts on heating oil. In an interview, Rodriguez said Chávez, 51, ordered the giveaway so poor Americans wouldn't have to choose between food and heat.

"The only difference between Citgo and other companies is that Citgo has only one shareholder," he said, referring to the Venezuelan president.

State Department spokesman Adam Ereli welcomed the heating aid, saying, "Citgo is an American company. They are helping Americans in need. That is a good thing."

Earlier, the company's Hurricane Katrina aid efforts earned a nod from Bush. "The good works of Citgo demonstrate the character and great strength of our nation," the president wrote Citgo Sept. 27.

About Citgo Petroleum

President and CEO: Felix Rodriguez.
What it does: Citgo refines, markets and transports petroleum products; operates 14,000 independent retail outlets in the United States, mainly east of the Rockies; and owns oil refineries in Illinois, Louisiana and Texas.
Employees: About 4,000.
2004 net revenue: $32 billion.
2004 net income: $625 million.

Sources: Citgo, Hoover's






Yet, there are echoes in Citgo's recent performance of what has transpired elsewhere in Venezuela's oil industry since Chávez was elected in 1998. After a coup in 2002 briefly ousted him from power, Chávez retaliated by purging the state-owned oil company. Thousands of veteran executives and petroleum engineers were cashiered, replaced by those politically loyal to the president's revolutionary aims.

Anti-American foreign policy

Today, PDVSA's oil production is down to 1.5 million barrels a day from 3.3 million barrels in 1999, says Luis Giusti, who quit as national oil company president when Chávez took over. But thanks to oil prices above $60 a barrel, Chávez's control of PDVSA has allowed him to lavish billions of dollars on social projects and an anti-American foreign policy.

Citgo, which sells gasoline through more than 13,500 retail stations and is known for its iconic sign towering over Fenway Park's left-field wall, paid the Venezuelan government $697 million in dividends in 2005, up from the previous year's $400 million, Rodriguez said.

PDVSA — the acronym is pronounced Ped-a-vay-sa — first acquired 50% of Citgo in 1986. Four years later, the Venezuelans bought the remaining half of the company from Southland, better known for its ownership of the 7-Eleven convenience stores. The company's six refineries, with a capacity of 1.1 million barrels of oil a day, are ideally suited for Venezuela's sulfurous, heavy crude oil.

Throughout the 1990s, Venezuelan oil officials allowed the company's American managers enormous autonomy. "Citgo was an American company. We happened to own it," said Giusti, who headed PDVSA until Chávez took over. "We managed it at arm's length."

That changed under Chávez. In October 2000, the new president tightened control over Citgo by naming as company president a former army general, Oswaldo Contreras. He was the first Venezuelan to hold the position.

Bush was elected president the following month, but relations didn't completely sour until after Sept. 11, 2001, when Chávez likened the U.S. war in Afghanistan to the terror attacks in New York. Washington later publicly welcomed the coup that toppled him for two days in 2002. Chávez has accused the Bush administration of planning his assassination.

In November, two weeks after leading anti-American protests at a hemispheric summit in Argentina, Chávez told a business group in Caracas: "The planet's most serious danger is the government of the United States. ... The people of the United States are being governed by a killer, a genocidal murderer and a madman." The comment followed congressional testimony by a State Department official that labeled Venezuela "a threat to regional stability."

Asked how the persistent bilateral friction was affecting Citgo, Rodriguez replied, "No effect. Nothing at all." But Chief Operating Officer Jerry Thompson, the most senior American remaining at the company, acknowledged Citgo's customers are concerned. "What it introduces is an element of anxiety, and our competition takes full advantage of that," he says.

The uncertainty was exacerbated for much of last year by a protracted and costly relocation of corporate headquarters, management upheaval and Venezuelan officials' repeated suggestions that they might sell some or all of Citgo.

After decades in Tulsa, Citgo last year completed an $82 million shift to its new five-story headquarters in the heart of Houston's Energy Corridor. The move was designed to benefit the company by planting it squarely in the world's self-proclaimed "energy capital."

But asked whether the move was worth the cost, Thompson says, "In my personal opinion, no."

THAT'S WHAT COMPANIES SHOULD DO, FOCUS ON THE POOR PEOPLE NOT ONLY IN WEALTHY

no more freebies and hand outs for commie losers

TeleSUR _ Fecha: 07/01/2009
La empresa Citgo, filial de la estatal Petróleos de Venezuela (PDVSA), anunció este miércoles que se compromete a mantener los programas sociales establecidos en EE.UU., incluyendo la ayuda para el combustible de calefacción a familias de bajos ingresos, así lo dio a conocer su presidente, Alejandro Granados.

Granados, ratificó que la decisión de Citgo de mantener su iniciativa de ayuda para las familias de bajos ingresos en EE.UU., supone un "fuerte compomiso" y "un gran esfuerzo" por parte la filial y sus accionistas "a la luz de la actual crisis financiera global y su impacto en la industria petrolera en general".

El congresista puertorriqueño José Serrano, dijo que recibió la noticia "con mucho alivio".

Tras el paso del huracán Katrina en 2005, Venezuela propuso la iniciativa a varios legisladores norteamericanos quienes solicitaron a las petroleras que donaran un 10 por ciento de sus beneficios a los perjudicados por el desastre, pero sólo Venezuela respondió.

Luego de la propuesta, los fondos destinados por Venezuela a familias desfavorecidas en EE.UU., han llegado a un número de hogares cada vez mayor.

En 2008, el programa proporcionó combustible a unos 200 mil hogares de 23 estados.

Además los fondos de Citgo financiaron la calefacción a 210 centros de acogida para personas necesitadas en 14 estados.

Citgo también promueve otros programas sociales en EE.UU., como la distribución de bombillas de bajo consumo a hogares con pocos ingresos en estados como Houston y Corpus Christi (Texas), Lake Charles (Luisiana) y Washington.

PDVSA recorta producción en 189 mil barriles

La estatal PDVSA informó este miércoles que redujo en 166 mil barriles diarios sus exportaciones de crudo a EE.UU., como parte del recorte de 189 mil barriles diarios de su producción, acordado en el seno de la OPEP en diciembre pasado.

"PDVSA ya ha informado a los socios y clientes acerca del estricto cumplimiento de la medida (de recorte) a efectos de que tomen las previsiones, en particular a las refinerías de Chalmette y Sweeney (en EE.UU)", indicó un comunicado de la empresa.

La estatal venezolana precisó que de los 189 mil barriles diarios de producción recortados, 166 mil corresponden a ventas a EE.UU., 18 mil a China y 5 mil a Europa.

A través de un comunicado de prensa, la estatal venezolana detalló los recortes hechos por las siguientes empresas desde el inicio de este año: Petromonagas 90 mil barriles diarios (b/d); Petrocedeño 13 mil b/d; Petroboscán, 30 mil b/d; Petroregional del Lago 10 mil b/d; Petroritupano 6 mil b/d;

Petrolera Indo Venezolana 8 mil b/d; Petroquiriquire 9 mil b/d, todas estas producciones iban destinas a EE.UU.

De igual forma, la empresa Petrolera Sinovensa, cuyo crudo tiene como destino a China, está recortando 18 mil b/d y Petroperijá 5 mil b/d, barriles que iban para Europa.

La actual disminución de 189 mil barriles de crudo, se suma a las reducciones de producción de 46 mil b/d y 129 mil b/d asumidos por PDVSA con respecto a lo estimado por la Opep en las reuniones de septiembre y octubre de 2008, totalizando una reducción de 364 mil barriles de crudo diarios.

De esta manera, la producción actual de Venezuela está establecida en 3,01 millones b/d

DIME A VER FREDD, ES ESO LO QUE DEBEN HACER TODOS LOS GOBIERNOS!