Citgo, the last gem of the Venezuelan oil empire

Pdvsa's subsidiary in the US is the main badet of the Chavez government abroad

WASHINGTON (AFP). – Citgo, the American subsidiary of the Venezuelan oil group Pdvsa, is the last major badet of the government of

Nicolás Maduro

abroad which allowed him to sell crude in the US market and served as an intermediary to access the financial system.

At a time when the United States regards the Maduro government as "illegitimate" and recognizes the authority of the self-proclaimed president in charge

Juan Guaidó

,

Washington

announced sanctions against the state oil company.

"Citgo was the anchor point of the US crude market," said Christopher Sabatini, professor of international relations at Columbia University, who described the company as "the last remaining gem of the year." Venezuelan oil empire ".

Citgo, based in Houston, has three refineries with a processing capacity of 749,000 barrels a day, according to the company's data.

US Treasury Secretary Steven Mnuchin said Citgo would be able to continue its operations, provided its profits are deposited in a blocked account in the United States.

Citgo, founded in 1910, has 3,500 employees. The company operates 48 terminals, 9 pipelines and a network of more than 5,000 branded stations across the United States.

Francisco Monaldi, a scholar at the Baker Institute of Rice University in Houston, explained that out of half a million barrels sold daily by Venezuela in the United States, Citgo is the second largest customer. But its strategic importance had two aspects: on the one hand, to sell the crude, and on the other hand, it was an extremely valuable badet on the financial market.

"Historically, it was the ability to sell heavy oil, but recently, when PDVSA began to introduce moratoriums and sanctions, no one wanted to give credit to PDVSA," said Monaldi.

Maduro has announced lawsuits against the US's decision to impose sanctions on the Venezuelan state corporation.

"Citgo is a business with a good business in the US They can be sued in the United States and receive a payment, which allows PDVSA to buy products without having to pay in cash", said Monaldi.

"This is a strategic resource in this sense," said Monaldi, who also explained that this company had allowed Venezuela, the country with the largest oil reserves in the world (300,000 million barrels), to have a lobby in the United States. , in the oil industry.

96% of the Venezuelan government's foreign exchange earnings come from oil. Oil production stands at 1.1 million barrels a day, its lowest level in 30 years, due to lack of investment.

"This will crush the Venezuelan economy, it will have a dramatic effect," said Sabatini, explaining that with such penalties, the process of exporting to other countries would not be immediate , because of the specific nature of the transformation of Venezuelan crude oil.

As for its effect on oil prices in the United States, one of the big reasons why Washington has not imposed such sanctions so far, Sabatini said, which is harder to predict.

"At the moment, the United States is producing enough and the markets are supplied, which may not disrupt the markets," added the expert.

A key company

5000 stations

They are badociated with the Citgo brand in the United States. The company, founded in 1910 and employing 3,500 people, operates 48 terminals and 9 pipelines. Its headquarters are in Houston and it has three refineries.

1.1 million barrels a day

Production in Venezuela has reached its lowest level in the last 30 years due to lack of investment; The government's foreign exchange earnings come from 96% of the oil.