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Daily Forex News Update

Aug 13, 2019 12:00 am GMT
By Asim

Exclusive: Citgo chooses new CEO to navigate political, legal turmoil - sources

Daily Forex News Update

Exclusive: Citgo chooses new CEO to navigate political, legal turmoil - sources
Commodities2 minutes ago (Aug 13, 2019 01:06AM ET)
By Marianna Parraga
(Reuters) - Citgo Petroleum Corp has selected Carlos Jorda as its next chief executive, according to three people familiar with the matter, turning to a seasoned refinery expert and native Venezuelan to run a company facing legal attacks and working under U.S. sanctions against parent Petroleos de Venezuela (PDVSA).
Citgo cut ties with PDVSA earlier this year after U.S. President Donald Trump's administration sanctioned the state-run company and recognized Juan Guaido, Venezuela's congress chief, as the nation's legitimate leader. Citgo officials loyal to President Nicolas Maduro were ousted and new boards for PDVSA and Citgo were named by the Venezuelan congress in February.
An appointment could be announced as soon as this week, the people said. Jorda, 69, was chairman of Citgo Petroleum between 1999 and 2002 and retired from the company in the early 2000s. He is a director at Delek US Holding, an oil refiner based in Tennessee, and an adviser at consultancy Gaffney, Cline & Associates.
A Citgo spokeswoman referred questions on Jorda and the potential appointment to a June statement acknowledging that the board was searching for a "leader who can best navigate the complex geopolitical and financial landscape."
Jorda, who one person said has not yet formally accepted the offer, could not be reached for comment. PDVSA and a spokesman for Guaido did not reply to requests for comment.
Venezuelan Oil Minister Manuel Quevedo said over the weekend that the Trump administration is "stealing" Citgo, applying "irrational measures" and pursuing an economic war against Maduro.
The next CEO will take over a profitable business with nearly $30 billion in revenue last year, according to company disclosures. Citgo is the eighth largest U.S. refiner by capacity and markets through a network of 5,300 retail outlets.
But it is a company under siege on several fronts: Maduro has his own directors and considers the separation from PDVSA as illegal; creditors want to grab Citgo in payment for Venezuela's debts; and the U.S. Justice Department is probing its role in alleged bribery-for-contracts schemes.
Luisa Palacios, a Venezuelan executive appointed by Guaido to lead Citgo's board, would remain as chair and other directors also would continue, one of the people said.
The decision comes as a U.S. court confirmed the Guaido administration's authority to appoint the Citgo board, rejecting a suit by Maduro-appointed officials seeking to retake control of the company.
Washington last week issued an executive order freezing any property of the Venezuelan government in U.S. territory and opening a window for the enforcement of secondary sanctions on the country, where PDVSA is struggling to allocate and receive cash from exports.
The order, along with new licenses permitting some exceptions, aims to protect Venezuela's overseas assets, especially Citgo, from some creditors while giving power to Guaido's representatives to negotiate with foreign holders of Venezuela's debt.
Citgo operates refineries in Texas, Louisiana and Illinois that can process up to 749,000 barrels of crude oil per day. Shares in its U.S. parent, Citgo Holding, were used by Maduro as collateral for debt due in 2020 and for a loan from Russian oil company Rosneft.

   
   


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