Thursday, January 12, 2006

Worries Over Citgo

The worriers have reason to be concerned:

One of the USA's largest refiners, Citgo is a subsidiary of Venezuela's state-owned oil company, Petroleos de Venezuela S.A. (PDVSA). As such, it ultimately belongs to Venezuelan President Hugo Chávez, an avowedly anti-American leader who counts Fidel Castro among his closest friends and mocks President Bush as a "genocidal murderer."

The question of Chávez's influence over Citgo was highlighted by the company's recent provision of 25 million gallons of subsidized home-heating oil to poor people in the northeast USA. More than 100,000 households in four states should eventually benefit from the low-cost heating aid.

But some worry that Venezuela's ownership of more than 6% of U.S. refinery capacity gives Chávez, a former paratrooper given to wearing red berets and military fatigues, the power to cripple as well as comfort.

As Hurricanes Katrina and Rita demonstrated, any disruption to the nation's refining industry instantly increases gas prices. What if Chávez, who periodically threatens to curtail oil shipments to the USA, closed Citgo's refineries?


Anonymous Julio C. Zangroniz said...

One answer: chavez' Bolivarian Revolution would lose a tremendous amount of income that, right now, it cannot do without.
According to a highly-placed friend, who must remain nameless, the U.S. government feels that chavez would has far more to lose, at least for the time being.
And as things tighten up in Venezuela, as oil industry efficiency and oil fields productivity go down, while the head clown continues to make overseas commitments that eventually will boomerang back to blow up in his face, the future is not bright for Venezuelans.

1/12/2006 10:35 AM  
Blogger La Ventanita said...

Besides, US as well as China has started to purchase oil in Africa, which could account for the fact that Venzuela dropped to 5th place in the US oil suppliers list

1/12/2006 3:26 PM  

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