Exclusive: Citgo valued at more than $10 billion in revised bids - sources

Tue Dec 16, 2014 2:40pm EST
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By Mike Stone and Jessica Resnick-Ault

(Reuters) - Citgo Petroleum Corp, Venezuela's U.S. oil refining unit, has received revised bids from at least four bidders, some which have valued the company at more than $10 billion, according to three people familiar with the matter.

Pricing at the top range of bids and tumbling oil prices could make the cash-strapped Venezuelan government less ambiguous towards divesting Citgo. An Oct. 26 El Universal newspaper interview with Venezuelan Finance Minister Rodolfo Marco in which he said Citgo's sale "has been ruled out" stirred confusion among interested parties.

The companies that made bids in December include Marathon Petroleum Corp (MPC.N: Quote), Valero Energy Corp (VLO.N: Quote), HollyFrontier Corp (HFC.N: Quote) and a consortium of TPG Capital LP and Riverstone Holdings LLC, the people familiar with the matter said. They asked not to be identified because the matter is confidential.

They said some bids came in at more than $10 billion while others were below $7 billion. Bidders have taken different views on the fluctuating value of crude oil held at the refineries, future crude oil purchases from OPEC member Venezuela and potential environmental liabilities, the people said.

Citgo declined to comment.

Citgo runs three refineries in the United States with a total capacity of 750,000 barrels per day. The party that acquires all of them would have major refining capacity in the U.S. Midwest and on the Gulf Coast, benefiting from a boom in U.S. oil production.

Lazard Ltd (LAZ.N: Quote), the investment bank hired by Venezuela's state-run PDVSA to explore a sale of Citgo, has not told bidders if there will be an additional round of bids, the people familiar with the matter said.

Representatives for Lazard, PDVSA, Marathon Petroleum and HollyFrontier did not return requests for comment. Representatives for TPG, Valero and Riverstone declined to comment.   Continued...

People wait for service in a Citgo gas station in Kearny, New Jersey September 24, 2014. REUTERS/Eduardo Munoz