Citgo was founded in 1910 by Oklahoma businessman Henry Latham Doherty but in 1990 it was sold to PDVSA, Venezuela’s state-owned oil firm.
PDVSA, which is struggling with low global oil prices, last year took out two loans totalling around $3billion from Russia’s state-owned oil firm, Rosneft, using Citgo as collateral.
Rosneft is also on a list of companies who are not permitted to trade with the US for ‘violating international law and fueling conflict in Ukraine.’
Ironically Rosneft signed a strategic partnership agreement in 2011 with Exxon-Mobil, whose then President Rex Tillerson is now US Secretary of State.
In the event that Rosneft were to acquire CITGO, we would expect a thorough, conflict-free, and expedient review.
In the event that the Venezuelan government defaults on its debts obligations to Rosneft, the Russian government could readily become the second-largest foreign owner of U.S. refinery capacity. Such a development would give the Russians more control over oil and gas prices world-wide, inhibit U.S. energy security, and undermine broader U.S. geopolitical efforts.