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Sanctions put Citgo at disadvantage to rivals, PDVSA ad-hoc chair says

·2 min read

July 23 (Reuters) - Sanctions barring U.S. imports of Venezuelan crude put refiner Citgo Petroleum Corp at a disadvantage to better-financed rivals, the board chair named by Venezuela's political opposition for state oil company PDVSA said on Friday.

Many refineries on the U.S. Gulf Coast - including Citgo's facilities in Texas and Louisiana - were designed to process heavy, sour crudes, which historically came largely from OPEC member Venezuela.

After Washington imposed sanctions on PDVSA two years ago, Venezuelan crude "disappeared" and U.S. refiners have competed for alternatives from Colombia, Mexico and Canada, said Horacio Medina, chair of the PDVSA ad-hoc board named by the opposition, which has controlled Citgo since 2019.

"These refineries have an important advantage over Citgo," Medina told opposition lawmakers. "They have investors with deep pockets who were capable of putting in money to make investments and modify some of the plants ... to adapt them to process light and medium crudes, which we have not had."

Citgo Chief Executive Officer Carlos Jorda last month said that the company was working on processing more lighter crudes, and its refineries were on track to boost utilization rates in the second quarter after bad weather hit some plants early this year.

The eighth-largest U.S. refiner, with a total capacity to process some 769,000 barrels per day between its three plants, has suffered net losses in six of the last eight quarters, including a $667 million total loss for 2020 and a $180 million loss in the first quarter of 2021 due to weak demand and storm-related disruptions.

The company has refinanced and raised new debt and is expecting an about $500 million income-tax refund to bolster liquidity this year.

U.S sanctions on PDVSA were meant to pressure Venezuelan President Nicolas Maduro's government, which stands accused of corruption and election rigging. Maduro has accused the opposition of "stealing" Citgo. (Reporting by Luc Cohen in New York; Additional reporting by Gary McWilliams in Houston; editing by Grant McCool)

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