Venezuela Says It Wants $10 Billion for Citgo Oil Assets

Aug 05, 2014 7:57 pm ET

(Updates with comments from Ramirez starting in second paragraph, Citgo heating program in fourth paragraph.)

Aug. 5 (Bloomberg) -- Venezuela won’t accept less than $10 billion for its oil refining and marketing assets in the U.S., the head of state-owned Petroleos de Venezuela SA said.

“Their value is much, much more,” Rafael Ramirez, president of the oil producer known as PDVSA, told reporters today. PDVSA is receiving offers for Houston-based subsidiary Citgo Petroleum Corp. and will sell the company if an acceptable proposal is made, he said, without elaborating further.

“We are not a refining company, we’re an oil producing company,” Ramirez said during the commemoration of 100 years of Venezuelan oil production in Zulia state.

Citgo said PDVSA has put it up for sale in a July 29 bond prospectus. The company owns three refineries capable of handling about 749,000 barrels a day in Louisiana, Texas and Illinois. The company sells gasoline through about 6,000 stations and donates heating oil to 200,000 low-income families during winters.

Venezuela President Nicolas Maduro is seeking to sell foreign refineries to boost oil exports to China, raise cash and reduce the risk of having assets seized if it loses international lawsuits brought by former oil partners, GlobalSource Partners’ Ruth de Krivoy and Tamara Herrera said July 31 in an e-mailed report to clients.

Biggest Exporter

“Our situation is not like many analysts have said, claiming that we need fiscal revenues,” Ramirez said.“We are doing well with our fiscal revenues from the oil sector.”

Venezuela is Latin America’s biggest oil exporter, sending abroad 1.8 million barrels a day in 2013, according to the BP Statistical Review of World Energy.

Maduro has spent revenue from exports on social programs created by predecessor Hugo Chavez and debt repayments, pushing the country’s public sector deficit to 12.3 percent of gross domestic product last year, according Barclays Plc.

Citgo had sales of $42.3 billion last year and earnings before interest, taxes, depreciation and amortization of $1.8 billion, according to the bond prospectus.

--With assistance from Jose Orozco in Caracas.