Chavez calls Venezuela-owned Citgo "bad business"

[naaman fletcher]

Oct 25 (Reuters) - U.S. refining and gas station company Citgo is an undervalued, bad business that its owner Venezuela is currently stuck with, President Hugo Chavez said on Monday.

"Citgo is bad business. We have not been able to get out of it, we are subject to U.S. law," Chavez said on a late night TV appearance following a tour of Europe, Russia and the Middle East during which he announced the sale of some Venezuelan oil assets.

"That company has eight refineries, I don't know how many tanks, it distributes fuel via 8,000 stations in the United States, yet it makes us no profit," Chavez said with indignation.

He stopped short of saying he was seeking to sell Citgo, one of the United States' better known gas station brands.

http://www.reuters.com/article/idUSN255577720101026

[social_critic]

1. in 2007 citgo paid dividends of $1.34 billion

the dividends is what the owner, PDVSA, receives. Business isn´t as good because oil consumption has fallen or is flat. Citgo also suffers from the drop of exports of heavy crude from Venezuela to the USA. But the business seems to be sound. If they want to sell it, it must be because they don´t want to own anything in the USA for political reasons. Or maybe they are running out of money and need it to pay for social programs.

[naaman fletcher]

2. It's sort of interesting

What Chavez means by "bad business". That could mean a lot of things. Personally I would suggest that since the strike in (was it 2002?) when chavez then replaces a plot of PDVSA people who were against him with cronies that the business has probably not operated as well. Most importantly though is that if I was Chavez I would not want a lot of assets in the U.S. that could be targeted by the US government or civil lawsuits by companies' whose businesses were appropriated.

[social_critic]

3. The us government will not target Citgo

But i suppose the Exxons of the world are salivating, they have an arbitration filed against PDVSA, and they will likely win something because they lost their Venezuela business with zero compensation thus far.

I do wonder, will those oil companies move to freeze PDVSA assets in the USA so they can not be sold.