Refiner Citgo Petroleum Corp has reported first-quarter net profit of $937 million on firm motor fuel demand, refining output and margins, a strong result that could help the Venezuela-owned company negotiate with creditors.
By Reuters – Marianna Parraga
May 11, 2023
The profit, compared to $245 million in the same period last year, continued a string of solid earnings by the firm, which operates oil refineries in Texas, Louisiana and Illinois.
“Outstanding financial and operational performance continued into the first quarter,” Chief Executive Officer Carlos Jorda said in a statement late Wednesday.
Last year, Citgo (PDVSAC.UL) posted a record $2.8 billion annual profit, rebounding from two straight years of losses with a deficit of $160 million in 2021.
This and last year’s results, which exceeded the company’s forecast, could be used as leverage to negotiate with a growing list of creditors that have flocked to U.S. courts to cash arbitration awards from asset expropriations in Venezuela, according to the head of a board supervising the refiner.
Last week, a U.S. court of appeals granted a temporary stay preventing six companies from joining a proposed court auction of shares in a Citgo Petroleum parent, giving Venezuela a small relief in the long-standing legal battle.
Citgo’s crude processing slightly declined to 772,000 barrels per day (bpd) in the first three months of the year from the previous quarter, with crude capacity utilization reaching 96% versus 104% in the last quarter of 2022.
The refiner, which in the past was dependent on Venezuela’s heavy oil, continued diversifying crude and product trading with business partners in Canada, Egypt, India, Argentina, Chile, Brazil, Mexico, Portugal, Spain, and Oman.
During the quarter, Citgo invested $127 million in turnaround and catalysts and incurred an additional $53 million of capital expenditures.
The refiner on Thursday announced an offer to purchase up to $472.98 million of its 9.25% senior secured notes due 2024 at a purchase price equal to 100% of the principal amount.
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