By AuxHistory | AuxBeacon News Contributor
[Editor’s Note: AuxBeacon readers will recall that CAP leadership arranged for CITGO to fund duplicate Congressional Gold Medals and Civil Air Patrol’s dinner awards banquet in November 2014.]
On Wednesday 22 NOV 2017, Venezuela’s government announced that former oil minister and cousin of late leader Hugo Chavez, Asdrubal Chavez, would be the new president of U.S.-based refiner CITGO. President Nicolas Maduro made the announcement on state television.
On Tuesday 21 NOV 2017, Venezuelan Military intelligence agents arrested/detained Jose Pereira, acting president of U.S.-based refiner CITGO and five of the subsidiary’s top executives. This took place during an event at state oil company PDVSA’s headquarters in Caracas.
PDVSA is Petróleos de Venezuela, S.A., the Venezuelan state-owned oil and natural gas company. It was founded on 1 JAN 1976 with the nationalization of the Venezuelan oil industry, the world’s fifth largest oil exporter.
In 1986, PDVSA bought 50% of the United States gasoline brand CITGO from Southland Corporation. It acquired the remaining half in 1990. This gave PDVDSA control of 10% of the US domestic oil market, with the two biggest consumers of Venezuelan petroleum being the United States and China.
PDVSA added Russia’s Rosneft as an extraction partner in 2013, with the anticipation of extracting 2.1 million barrels of petroleum per day. With the worsening of Venezuela’s Socioeconomic Crisis, Venezuela borrowed 1.5 billion dollars from Russia, offering 49.9% of PDVSA’s share in CITGO as collateral, with a high probability of default and concerns that it would be absorbed by Rosneft.
An unexpected surprise came on 30 OCT 2018 when PDVSA paid $949 million on its CITGO backed bond to investors. The payment meant that PDVSA could continue to own CITGO, with the next payment due in April of 2019.