Valero confirms Lyondell-Citgo interest

Tuesday, May 2, 2006

US oil refiner Valero is interested in acquiring Lyondell-Citgo, the refinery the Citgo US unit of Venezuela's state oil firm PDVSA is selling, Valero spokesperson Mary Brown Rose told BNamericas.

"We will follow the bid process the seller outlines and evaluate the asset based on our 20-year forecast," she said. The Lyondell-Citgo refinery has a 268,000 barrel-a-day capacity and is located near Houston, Texas.


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It is not clear how much Lyondell-Citgo is worth. Speaking off the record, a lawyer with PDVSA told BNamericas the company hoped to make at least US$4bn from the sale of the refinery, calling the figure "a base price". However, PDVSA deputy president for refining Alejandro Granado said last week that "no base price" had been set. Valero also declined to offer a firm figure.

It was a year ago that the administration of Venezuela's President Hugo Chávez announced its intent to sell some of the refineries now owned by Citgo, labelling them bad business and arguing some discount-on-feedstock deals were a bane on Venezuela's sovereignty.

When the warning was issued, many believed it was an idle threat from a notoriously anti-US, left-wing leader, but since then US-Venezuela relations have deteriorated even more, to the point that diplomats were mutually expelled some months ago.