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Sell of Citgo continues, according to Reuters

Sell of Citgo continues, according to Reuters

Posted by Dubraswka Aguilar on November 06, 2014

At least three oil companies are still actively bidding for Citgo Petroleum Corp, the US refining arm of Venezuela's state-run oil holding Petróleos de Venezuela (Pdvsa), even after the country's finance minister, Rodolfo Marco Torres, said that the sale was no longer going ahead, according to three sources familiar with the situation, Reuters reported.

The investment bank hired by Pdvsa to conduct the sale, Lazard Ltd, has not completed the sale, the sources said on Tuesday, and a deadline for a second round of bids is expected later this month. The sources declined to be named because they were not authorized to speak publicly.

Any deal for Citgo, which could be worth USD 10 billion, could help to reshape the US refining landscape, giving the winning bidder access to major refining assets in the Midwest and on the Gulf Coast at a time when US oil production is soaring.

A Citgo representative did not immediately provide comment. Officials at Pdvsa and Venezuela's oil ministry could not be immediately reached for comment. A Lazard representative declined to comment.

Venezuelan Finance Minister Rodolfo Marco Torres said in an interview published in newspaper El Universal on October 26 that the sale of Citgo Petroleum "has been ruled out" and President Nicolás Maduro had "affirmed" the decision.

It was not immediately clear why Lazard was going ahead with the auction despite that statement, and whether the process could eventually be called off.

Since Venezuela began the auction this summer, the price of oil has plunged from about USD 105 per barrel to USD 77 per barrel, putting huge pressure on the government's budget, which relies a lot on revenue from oil sales.

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