Citgo's New Board Arrives, to Hold First Meeting

February 21, 2019

A board of directors appointed this month by Venezuela's opposition-controlled congress to run state-owned oil firm PDVSA's U.S. unit Citgo Petroleum on Thursday was arranging its first meeting at the company's headquarters, according with two people familiar with the matter.

Venezuela's National Assembly, led by opposition leader and self-proclaimed president Juan Guaido, last week appointed new boards for PDVSA and subsidiaries PDV Holding, Citgo Holding and Citgo Petroleum amid a political battle to control the country's foreign assets.

Citgo Chairwoman Luisa Palacios and other members of the new boards arrived at the refiner's Houston offices early Thursday after working with advisers to legally assume control of the company in Delaware, where the U.S.-based refiner is registered, according to people familiar with the matter.

Palacios was working from the chief executive officer's office, according to one of the people. It was unclear on Thursday if she plans to take the CEO title.

Their arrival represents a solid step in Guaido's effort to take control of the nation's assets outside Venezuela. Many Western countries recognized Guaido as Venezuela's legitimate head of state, but Socialist President Nicolas Maduro retains control of state institutions, including PDVSA.

Maduro calls Guaido's claim to the presidency an attempted coup and has promised he will not allow Citgo to be "stolen."

Four top Citgo executives were removed this week from their posts ahead of the arrival of the new board. The four were linked to the previous board, led from a Caribbean office by Asdrubal Chavez, a cousin of Venezuela's late President Hugo Chavez that was appointed by Socialist President Nicolas Maduro in 2017.

Other changes to staffing at the company's finance, public affairs and treasury departments have followed, according to the people.

A Citgo spokeswoman did not respond to requests for comment.

Since the United States imposed sanctions on PDVSA on Jan. 28, barring its U.S. customers from transferring sale proceeds to the Venezuelan firm, Citgo has not publicly disclosed executive changes or its stance on the new board of directors.

The subsidiary can no longer pay its parent company for purchases of Venezuelan oil, unless the money is deposited in new bank accounts to be set up by Guaido's team. Citgo imported 175,000 barrels per day of Venezuelan crude last year, according to Refinitiv Eikon data.

Citgo is the eighth-largest U.S. refiner and owns plants in Illinois, Texas and Louisiana that provide about 4 percent of U.S. refining capacity. It also operates pipelines and terminals, and supplies fuel to a retail network of 5,000 gas stations across 30 U.S. states.


Reporting by Marianna Parraga



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