Citgo turns into cash cow, Fitch says

Bond rating agency Fitch put out a report on Citgo, saying that its first-quarter earnings (EBITDA) were almost as much as full-year earnings in 2010. The company is about to have all sorts of free cash flow, Fitch says.

As usual, there are several ways to see this:
– The Venezuelan state is going to be happy to have another cash generator on its hands, along with the $100-a-barrel prices it’s getting at PDVSA
– US drivers can go back to scapegoating Hugo Chavez for their $4 a gallon gasoline
– People looking for investment opportunities have all the more reason to storm over to other US refiners
– Lawyers for Exxon Mobil and ConocoPhillips are likely drafting up liens on that cash, and probably on the properties themselves

(add your own)

9 thoughts on “Citgo turns into cash cow, Fitch says

  1. otto

    Citgo is that there gas station chain boycotted by vast swathes of US Citizens, right? With no customers, how can they be making a profit? I don’t get it.

  2. westslope

    The 7-11 chain of convenience stores dumped CITGO gasoline to protest the not so nice things that Chavez said about the USA.

    Venezuelan children in 50 years from now can read how their former President’s big mouth cost his country plenty in addition to his polices already costing his country plenty. Evocative slogans will capture the period:

    ¡Mi patria o la pobreza!
    The internal bleeding of Latin America: 1/2 a millenia of self-inflicted wounds.

    Incidentally, who in their right mind would buy a piece of a refinery? To launder money!?!!

    1. Steven

      westslope, I seem to recall that 7-11 stopped selling Citgo mostly because Citgo could no longer supply the volumes that 7-11 needs to sell. (post 2002-2003 paro civico). That makes more sense than a changed base on politics. Most drivers simply don’t care where their gas comes from.

      1. sapitosetty Post author

        Close but not quite. 7-11 never stopped selling Citgo. Citgo halted all distribution in about 11 states in the central USA and urban myths started, claiming that some particular franchises had dumped Citgo for political reasons. Actually it was Citgo rationalizing its supply chain, as for years the company had been buying crude on the open market, which didn’t fit PDVSA’s business strategy. This page explains the urban myth.

  3. Cort Greene

    You would be suprised to find out many people in the US search CITGO out to buy their gas because of tthe Bolivarian revolution and against the so called boycott that is not working.

    And as soon as the corrupt bureaucracy is overthrown by the grassroots and the revolution is completed their will be more.

    1. sapitosetty Post author

      Welcome back, Cort. Just FYI, Otto was joking. And while I would be unsurprised if some people sought out Citgo, and I’d be unsurprised to hear that many people in certain subcultures do that, I would inded be surprised if any statistically measurable part of the US population did what you are saying. I’d love to see the evidence. I have always seen motorists as utterly useless when it comes to socially conscious purchasing of any sort. From what I’ve seen, such as after the Exxon Valdez disaster, people buy on price and convenience, and really nothing else.

      1. lgg

        Earlier this century, when I lived in the US, I always looked for a CITGO gas station.

        Not because I was Venezuela, but because in upstate NY, gas was way cheaper in a CITGO station that anywhere else.

        I was probably going for the “buy revolutionary gas” meme. I don’t know anymore :-P

      2. westslope


        I’m not surprised at all having spent time with US labour organizers and self-styled progressive sub-cultures.

        However, if you get a small number of people making consistent politically aesthetic consumer choices over time, not much changes. In the absence of campaigns and staged debates, nobody talks about Venezuela, nobody cares. Presumably, a petrochemical company like CITGO can find less politically vulnerable customers, and in a sense hide the product from plain view.

        But seriously now. If you were a purchasing agent, and in light of the recent loss of a high profile client, you wouldn’t take the company for every point possible?

    2. Kepler

      “And as soon as the corrupt bureaucracy is overthrown by the grassroots and the revolution is completed their will be more.”
      Hm…I think THIS is for you.
      Grassroots…revolution? There is no revolution in Venezuela. As for grassroots: do you know what’s the English meaning of the word “Soviet”? Right, council. Not that Chavismo had anything to do about socialism or power to the people, it’s all about Chávez and his military cronies.

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