These sales are pure profit. Venezuela bought the refineries cheap. Ruhr Oel, recently sold for $1.6 billion, was bought in 1983 for $250 million ($548 million in constant dollars), all of which is surely depreciated away. Explain to me again how it’s bad to cash out on an investment after tripling your money? I suspect that critics don’t really think selling Citgo is a bad idea. They just want the sale to wait so they and their pals can handle the billions of dollars in a more responsible manner — which in Venezuela is a euphemism for the money goes into my Miami condo, not yours.”
Citgo’s Corpus Christi refinery was bought in two parts for a total of $249 million. Lake Charles was $965 million. All of this money was spent in the 1980s, more than 20 years ago.
Some say Venezuela will lose an outlet for its crude. They ignore that when NuStar bought Citgo’s asphalt refineries, the new owner was very happy to sign a long-term supply contract with Venezuela. A refinery without crude isn’t very useful. There are other sources for heavy crudes, but PDVSA can certainly structure a sale to ensure that it keeps access to the U.S. market.
Even former PDVSA President Luis Giusti, who is no fan of Chavez, told me in an interview back in 2007 that it made sense to consider a sale of Citgo if the price was right.
Special note to the many new readers from Citgo: Thanks for visiting. You should feel comforted knowing that many of your coworkers have been visiting too. Any thoughts are welcome. Even if you just want to tell me I’m wrong. Your confidentiality assured, of course. One hint: if you do want to share anything confidential, do yourself a favor and don’t write from your work computer.