CITGO lost $ 180 Million in the First Quarter of 2021
05.24.2021 - NEWS

May 24, 2021 [EXPLICA] – CITGO Petroleum Corporation (CITGO) released today its performance results for the first quarter of 2021, which include a net loss of $ 180 million, a loss.


Before interest, taxes, depreciation and amortization (EBITDA) – of 21 million dollars, and an adjusted EBITDA of 10 million dollars. The quarter marked the first positive quarterly Adjusted EBITDA result for CITGO since the COVID-19 pandemic broke out.

The company’s overall quarterly performance was primarily affected by its February results, which were negatively impacted by the effects of winter storm Uri and which accounted for approximately two-thirds of the total net loss recorded during the quarter. The storm disrupted production of approximately six million barrels of the industry’s refining capacity, which included the full and forced closure of the Corpus Christi refinery for approximately three weeks. As a result, CITGO incurred repair expenses of approximately $ 21 million during the quarter. We estimate our excess energy and other utility costs at approximately $ 60 million as a result of the storm.

“We carefully managed our expenses and liquidity to meet the unique challenges of 2020 but Uri brought a new set of operational challenges that hit our people and our refineries hard,” said CITGO Executive President Carlos Jordá. “Our response to the unprecedented cold in February once again demonstrated our resilience as a company, and the most recent disruption caused by the outage at the Colonial Pipeline has provided another example of how CITGO overcomes difficulties as a team.”

Overall performance improvements recorded during the quarter were driven by higher profit margins and a higher refinery utilization rate, which increased to 83% in the first quarter compared to 75% in the fourth quarter of the prior year . Thanks to the reversal of the negative effects caused by the winter storm, CITGO saw significant improvements in the refinery utilization rate and profit margins in March.

“Now that the impact of the winter storm is behind us, we are encouraged by stronger demand, improved profit margins, and higher refinery utilization rates looming beyond the first quarter.” said Jordá.

First quarter highlights:

At a strategic and operational level

Refinery performance: Total refinery throughput in the first quarter was 693,000 barrels per day (bpd), including 54,000 bpd of intermediate raw materials, resulting in an overall crude utilization of 83%.

Exports: Refined product exports in the first quarter averaged 99,000 bpd and were mainly affected by refinery disruptions caused by the February winter storm, and by the continuing effects of COVID-19 on demand from other countries.

Operational excellence: The CITGO Corpus Christi refinery earned the 2020 ENERGY STAR® designation from the U.S. Environmental Protection Agency (EPA) for the second year in a row. Successively receiving this certification demonstrates the CITGO Corpus Christi refinery’s leadership in energy and environmental management within the oil industry, and reflects the company’s determination to reduce air emissions, increase efficiency, and achieve outstanding performance. environmental.

Notable personnel changes: On February 12, 2021, José Ramón Pocaterra was elected Chairman of the Board of Directors of CITGO Petroleum Corporation. Luisa Palacios resigned from the CITGO Petroleum Corporation Board of Directors, effective March 31, 2021, to assume a full-time position at an academic institution. Steven Scarpino joined CITGO on April 22, 2021 as the first full-time Director of Ethics and Compliance in CITGO’s history, reporting directly to the company’s CEO, Carlos Jordá, and with direct access to the Committee. of Audit of the Board of Directors On a financial level

Disciplined cost management: As of January 1, 2021, the company implemented a 10% reduction in employee salaries – excluding those with the lowest income. This cut, in addition to the temporary suspension of employer contributions to the 401 (k) retirement plan, will be revised in 2021 as industry conditions improve. Previously announced modifications to the salaried employee defined benefit pension plan are expected to result in an estimated reduction of approximately $ 40 million in annual spending. In addition, it is planned to use 70% in capex, scheduled shutdowns and catalysts in the second half of 2021 to preserve liquidity at the beginning of the year.

Refinancing: On February 11, 2021, CITGO successfully completed a private offering for $ 650 million of the total principal amount of the 6.375% Senior Secured Notes due 2026, in a transaction that had a significant underwriting and involved the participation of a broad and diverse group of investors. Net proceeds from the offering, along with available cash, were used to redeem the company’s $ 650 million of the company’s existing 6.25% senior secured notes due 2022, and to pay fees and expenses related to the offer.

Industry overview:

Changes in key aspects during the year include:

Oil demand: US oil demand in the first quarter was 18.5 million barrels per day (MMBPD), slightly lower than in the fourth quarter of 2020. Similarly, global oil demand was unchanged by 95.3 MMBPD from Q4 2020 to Q1 2021 due to ongoing COVID-19 containment challenges in other parts of the world. Demand for oil is expected to increase in 2021.

Gasoline demand: US gasoline demand in the first quarter was approximately 535 thousand barrels per day (MBPD) below the 2019 level at the end of April (~ 6% less). With the increase in the vaccination rate of the population that translates into greater mobility, the demand for gasoline is expected to reach between 2 and 3% of the levels reached at the end of the year in 2019.

Demand for distillates: US diesel demand in the first quarter was about 4% below the demand in the first quarter of 2019, but improved by 2% compared to the first quarter of 2020. For the month of April, the demand diesel was 2% higher than in 2019.

Aviation fuel demand: – US first quarter aviation fuel demand growth continued slowly and steadily, reaching 35% in the first quarter of 2019, compared to 38% in the fourth quarter of 2020. With the increase in the vaccination rate, consumer confidence in domestic travel is increasing; however, the existence and emergence of new international contagion centers is expected to result in a choppy recovery overall. Global aviation fuel demand is currently anticipated to be 20-30% below 2019 levels throughout 2021.

Utilization of refineries: the US refinery utilization rate averaged just 78% in the first quarter, in part due to approximately 6 MMBPD of refining capacity lost to winter storm Uri. April was the month with the highest utilization rate since the pandemic began, reaching 85%. With better product demand, the utilization rate for the remainder of the year is expected to be roughly 5% below the historical seasonal range of 85-95%.


Headquartered in Houston, Texas, CITGO Petroleum Corporation owns and operates three large-scale, deep-conversion refineries, with a combined crude capacity of approximately 769,000 barrels per day (bpd), located in Lake Charles, Louisiana; Lemont, Illinois; and Corpus Christi, Texas; has ownership or ownership interest in 40 active refined product transfer and storage terminals, and has access to more than 120 third-party and related party terminals through exchange, terminalization and similar agreements. CITGO Petroleum Corporation is owned by CITGO Holding Inc.

Forward-looking statements

Certain information included in this release may be considered “forward-looking statements” under applicable securities regulations and other laws that involve risks and uncertainties. These statements relate, among other things, to expectations regarding our industry, business strategy, goals and expectations regarding our market position and future operations or performance. We have used the words “anticipate”, “believe”, “could”, “estimate”, “expect”, “pretend”, “can”, “plan”, “predict”, “project”, “will”, “would do ”And similar terms and phrases to identify forward-looking statements, which only speak as of the date of this press release.

could cause actual events, developments and business decisions to differ materially from those contemplated in these forward-looking statements. These statements are based on assumptions and evaluations made by our management in light of their experience and their perception of historical trends, current conditions (including current market conditions), expected future developments, and other factors they deem appropriate. Although we believe that the assumptions on which these forward-looking statements are based are reasonable, any of these assumptions could be inaccurate, and the forward-looking statements based on these assumptions could be incorrect. In addition, our business and operations involve numerous risks and uncertainties, many of which are beyond our control, which could result in our expectations not being met or otherwise materially affecting our financial condition, results of operations and cash flows. of cash. We caution readers that these forward-looking statements are subject to known and unknown risks and uncertainties that may cause actual results to differ materially from projected results, expressed or implied. These risks and uncertainties include, but are not limited to, risks related to the effects of the ongoing COVID-19 pandemic, general economic activity, developments in the international and domestic oil markets, and changes and refinery operations. Readers are cautioned not to place undue reliance on these forward-looking statements.

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