Venezuela to take on Belarussian refineries?

Courtesy of the CIA World Factbook. Click for full entry on Belarus.

OK, I guess I’m back to all Venezuela, all the time. Site friend Kepler points me to this story:

Venezuela may acquire the assets of the Belarusian oil refineries in the near future. This was stated by the Belarusian Ambassador in Caracas, Valentin Hurinovich. “I think we will go further, and Venezuela will participate in the assets of our businesses, our refineries,” said the Belarusian diplomat.

According to Valentin Hurinovich, it is necessary for Venezuela to have its own assets for participation in the Belarusian industry, including oil refining. “Such negotiations are conducted, and I think Venezuela will become a partner in the near future,” said Valentin Hurinovich on air of the First National TV Channel on January 26.

On the one hand, this may be just the moment to buy refineries.Here’s what Bloomberg News said yesterday about the market for these plants:

A glut of refineries put up for sale by integrated oil companies after the global recession dragged down profits are now available for 80 percent less than they fetched in 2006…Blackstone Group LP, billionaires David and Charles Koch and energy producers from Brazil and Russia may be eyeing acquisitions of individual plants or company takeovers with refining margins almost tripling since Nov. 1…

In other words, it’s a buyers’ market. So maybe PDVSA can pick up assets on the cheap — exactly what it did with Citgo. People refer to Citgo as the jewel in PDVSA’s crown, but it was bought for something on the order of $1 billion. Its eventual value (based on comparable sales) exceeded $10 billion, though that number has probably dropped again.

On the other hand, you have to wonder if PDVSA should really be increasing its holdings of small, obsolete plants thousands of miles from headquarters in a country where people are more likely to speak Latvian than Spanish. Unlike all the mythical refinery construction projects that PDVSA or President Hugo Chavez have announced (Nicaragua, Jamaica, Vietnam, Fiji), this one could easily happen, as it’s just a change in ownership — a change that will likely exempt Belarus’s state oil company from having to put any money into its “joint venture” in Venezuela.