CARACAS: Venezuela has ruled out the sale of state oil company PDVSA’s US refining subsidiary Citgo Petroleum, Finance Minister Rodolfo Marco said in an interview published in local media yesterday.
“The sale of Citgo has been ruled out and the president has affirmed it,” Marco told newspaper El Universal.
“Venezuela will continue with Citgo and will continue to invest in refineries,” he said. Cash-strapped PDVSA was hoping the sale could fetch between $8bn and $10bn, welcome revenue amid falling oil prices, major debt payments and an economy widely believed to be in recession.
Several analysts, however, had put Citgo’s valuation at well below that, and the sale had come under fire locally from members of the Socialist government’s leftist bloc who said it was a covert privatisation. The government had shrouded the deal in secrecy, leaving analysts and industry players scrambling to piece together a rationale for the surprise divestment, and now the apparent reversal.
President Nicolas Maduro said last month Citgo would continue with a welfare project in the United States, a comment which was interpreted by some as a sign the government was reconsidering plans to sell, though he said nothing specifically about that. Venezuela hired investment bank Lazard Ltd to handle the sale.
Marco also said in the interview the Opec country is working on the hot-button issues of a gasoline price adjustment and a unification of exchange rates, politically risky moves which would help shore up finances.
“The exchange rate, fiscal and gasoline issues haven’t been shelved,” Marco said. “These are issues we’re working on and it’s President Maduro who decides.”
A package of reforms suggested earlier this year include unifying a complex system of exchange rates — effectively devaluing the bolivar currency — and hiking domestic petrol prices, currently the cheapest in the world at less than 2 US cents per litre.
Reuters
