Congressman urges Obama to block Venezuela's Citgo sale

[August 28, 2014]  By Zachary Fagenson
 
 MIAMI (Reuters) - A U.S. congressman urged the Obama administration on Wednesday to block the proposed sale by Venezuela's state oil company of its North American refining unit Citgo, saying it would be against "vital national interests".

Venezuela Oil Minister Rafael Ramirez said earlier this month that the country aims to exit Citgo "as soon as we receive a proposal that serves our interests."

Citgo [PDVSAC.UL] has three U.S. refineries in Illinois, Louisiana and Texas with combined capacity of some 750,000 barrels per day, and it also has 48 terminals.

Flanked by Venezuelan opposition figures, U.S. Representative Joe Garcia said the proposed sale by Venezuela's socialist-led government was "a huge concern."

The value of Citgo, he said, was derived from the refiner's links to Venezuela's state oil company PDVSA [PDVSA.UL] and the OPEC nation's crude oil reserves, which are the biggest in the world.

"It is one of the last assets that the Venezuelans have had and have not been able to damage its value," the Democratic congressman told a news conference in Miami.
 

"We believe that allowing this government to monetize this part of the Venezuelan patrimony would be a grave mistake."

China displaced the United States as the top destination for Venezuelan oil in 2013, and PDVSA's cash flow has been crimped as much of the oil is used to service loans from Beijing.

PDVSA is working with investment bank Lazard Ltd to sell Citgo, according to people familiar with the situation.

Garcia, whose district includes most of western Miami-Dade County and the Florida Keys, said U.S. companies were owed large amounts of money by Venezuela's government, which nationalized most of its oil industry under the late President Hugo Chavez.

"We don't want a grab bag with a regime that has thus far destroyed everything it's touched," Garcia said.

"I am not about to let them dissipate national assets for one more piñata among thugs. It's just not acceptable. ... The last thing we want them to do is to delink themselves from the U.S. and to not pay its debtors."

Garcia's constituents include many Venezuelan exiles who left home during Chavez's controversial time in office.

Accusing Venezuelan officials of committing abuses in a crackdown on protests against President Nicolas Maduro that began this spring, Washington has barred some government ministers and presidential advisers from entering the United States.

Members of the U.S. Congress, particularly Republicans and Florida lawmakers, have also called for the freezing of U.S. financial assets of Venezuelans considered to be rights abusers.

(Reporting by Zachary Fagenson; Writing by Daniel Wallis; Editing by Ken Wills)

[© 2014 Thomson Reuters. All rights reserved.]

Copyright 2014 Reuters. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.