A new battle for control of Citgo Petroleum, the eighth largest U.S. oil refiner and Venezuela's foreign crown jewel, could soon be unleashed under a proposed management shake-up by the South American country's opposition lawmakers, said Reuters.
The revamping would come despite the company posting strong profits after two years of losses and could lead to executive departures, experts and current board members said. The lawmakers say they want to shore up the stability of Citgo after three years of frequent reshuffles and as the political environment in Venezuela looks set to shift.
However, the U.S. State Department is worried that the changes could trigger a messy fight for control, two people involved in talks about the topic said. Washington has pressed Venezuelan lawmakers to stabilize the country's foreign operations.
Citgo, a subsidiary of state-run oil firm PDVSA, is currently run by boards appointed by Juan Guaido, whom Washington recognizes as Venezuela's legitimate leader. It views President Nicolas Maduro's 2018 reelection as a sham. But the power of Guaido has been waning, and some opposition politicians fear that his mandate as leader of Venezuela's parallel "interim government" may not be renewed in January.
Arguing that greater stability was needed, they approved a deal last month to move the power of board appointments for Citgo and Venezuela's other foreign assets from Guaido to a new super-advisory council. The three-member council, to be appointed by the lawmakers, will also supervise and evaluate Citgo's performance, proposing changes and designing legal strategies with the intention of protecting the refiner and the other companies abroad. Citgo and the U.S. State Department declined to comment.
The move was led by parties including Primero Justicia, which has called for all Venezuelan assets overseas to be transferred to an independent body. Julio Borges, Primero Justicia's leader, said new structure was needed to save Citgo and other holdings from meddling by individual parties. "We must take them away from political control," Borges told Reuters. Gustavo Marcano of the Primero Justicia party said the council "is a first step in giving greater stability to the foreign companies before any possible political changes."
After revisions that gave Guaido a say in the boards' make-up, Guaido's Voluntad Popular party agreed to the pact, two sources close to the decision said. Guaido's final approval will still be required for ratifying Citgo executive appointments.
As per MRC, Citgo Petroleum is willing to resume imports of Venezuelan crude, suspended since 2019 by Washington's sanctions on its parent company PDVSA, if the U.S. government authorizes the flow. Since March, top U.S. and Venezuelan officials have been engaged in political negotiations that could lead to Washington easing oil trading sanctions that have hit the OPEC country's production and exports. OPEC and the French government, representing Europe, have called for Washington to allow Venezuelan and Iranian crude to flow to consuming nations that are struggling to replace Russian energy supplies during the war in Ukraine.
mrchub.com