In a Reuters exclusive, it has been reported that CITGO’s parent company, Venezuelan national oil company PDVSA, is looking to sell its U.S. operations by the end of September. Rumors had been floating around relative to the refining operations for some time. The reason cited, referencing a handful of inside sources, is a cash crunch, and the sale is expected to generate $10 billion or more to meet that need. The assets on the table range from refineries to the marketing operation, and might be sold off individually.
CITGO retail has long been a U.S. marketer/retailer-driven operation on the street, and the association with uneven (to say the least) Venezuelan governments has created a vulnerably from negative online and social media campaigns. However, the extent to which that has created actual pushback from consumers is vague.
Alternatively, CITGO under PDVSA has taken part in a range of “social justice” initiatives, such as subsidizing heating oil for the poor and encouraging and promoting charitable activities among its marketers. That social justice push might also be in jeopardy in the event of a sale, though there have been rumblings that the follow through on some of these efforts has been lacking recently.
It would be easy to see this as a positive development for the marketing operations depending upon how the shakeout of assets occurs; however, there are potential ramifications for supply stability at least in the short run.
