August 14, 2023 [Reuters] – Refiner Citgo Petroleum Corp on Thursday reported a second-quarter net profit of $380 million, down from a year ago and from the previous quarter, as margins cooled.
The net income, compared to $1.29 billion in the same period last year and $937 million in the first quarter, continued a string of profits at the Venezuela-owned refiner, which operates plants in Texas, Louisiana and Illinois.
The result comes ahead of expected negotiations to settle over $20 billion in claims against Venezuela. The United States has so far shielded Citgo from those claims, but has encouraged a settlement. Some of the claims were backed by shares in one of the refiner’s parents.
U.S. refiners this year have scored big earnings on strong demand for gasoline, diesel and jet fuel and by running their plants near-full capacity.
Citgo processed 761,000 barrels-per-day (bpd) of crude in the second quarter, a capacity utilization level of 94%, compared with 772,000 bpd and 96% of utilization in the first quarter.
“We are starting the third quarter in a healthy position given our strong liquidity and operational performance,” said Chief Executive Carlos Jorda.
A federal court in Delaware has scheduled an October start for an auction of shares in a Citgo parent that could lead to a breakup of the company. Any transfer or sale of the shares would still require approval by the U.S. Treasury Department.
A negotiating team representing the South American country has held settlement talks with some of those creditors and holders of bonds defaulted by Citgo’s ultimate parent, Petroleos de Venezuela (PDVSA.UL).
Citgo reported it had $3.6 billion in cash and available borrowing at the end of the quarter after making a $192 million dividend payment. It has been repurchasing debt and in June bought $63 million in notes to reduce debt.
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