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A Watershed Moment For Turkey

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Turkey's upcoming elections in May…

Citgo Suspends Oil Refinery Unit In Texas

Venezuelan PDVSA’s crown jewel, U.S.-based refiner Citgo, has idled a gasoline production unit at a small refinery in Corpus Christi, Texas, Reuters reports, citing sources in the know.

The sources said the closure had been motivated by economic reasons, since the unit was not making any profit, while Citgo itself said in a regulatory filing it had idled the unit for “non-operational reasons.”

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Citgo, Reuters notes, has been running its refineries at lower than usual rates as a result of lack of spare parts, underinvestment, and low flows of light crude that refineries need to mix with Venezuelan heavy crude to produce fuels and other products.

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Citgo has been in the spotlight recently as the only profitable unit of the troubled Venezuelan oil company, which a Canadian miner is seeking to take control of in lieu of financial compensation for the forced nationalization of its operations in Venezuela by the late Hugo Chavez’ government.

Crystallex, the miner, managed to ink a settlement agreement with Caracas late last year, but quickly afterwards accused it of breaching the agreement and tried to seize control of Citgo through courts, to sell the stock. The breach, according to a lawyer for the Canadian company, was in the form of PDVSA approaching the legal system to overturn a court ruling that gave Crystallex access to Citgo’s stock. The court awarded the miner compensation of US$1.4 billion.

Crystallex is also not the only one eyeing Citgo as a means of getting what it claims it is due for the nationalization of its assets. ConocoPhillips also won a case against Venezuela and earlier this year stepped up its efforts to receive its dues by seizing PDVSA assets in the Caribbean. The strategy worked and PDVSA coughed up US$345 million as the first part of a US$2-billion settlement.

By Irina Slav for Oilprice.com

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