CITGO’s Owner Calls Off Sale

HOUSTON — Venezuelan state oil company Petróleos de Venezuela S.A. (PDVSA) reportedly called off the sale of its U.S. CITGO refining unit as bids came in below its $10-billion asking price.

PDVSA hired investment bank Lazard Ltd. to explore the sale of the Houston-based division, which operates three U.S. refineries. CITGO also sells motor fuels via nearly 6,000 U.S. gas stations.

Initial bids were accepted through the end of September, with a second round of bidding expected to follow. Although the bids were confidential, various media reports pegged Western Refining Inc., Tesoro Corp., Valero Energy Corp., PBF Energy Inc. and HollyFrontier Corp. as potential bidders.

Several media reports are now stating PDVSA has shelved the sale. Potential bidders were not informed of this decision by Lazard, reported Reuters, however few involved in the bidding process expect a sale to move forward.

"We are looking for more information about this. We don't know if the bidding process is still ongoing, but many companies will not want to continue with the due diligence, revealing information if the sale is not going to be made," a confidential source told the news outlet.

The assets that were up for sale boast annual EBITDA of approximately $1.5 billion. The three refineries, located in Lemont, Ill.; Lake Charles, La.; and Corpus Christi, Texas, are capable of handling 749,000 gallons of fuel per day.