The CITGO refining circuit was the jewel of the crown of the anti-national vision of the “oil opening” developed between the mid-eighties and the late nineties, which today, in a sort of paradox of politics and history, returns to the country with the privatization of PDVSA and the surrendering of the oil.

CITGO, a circuit that initially consisted of eight refineries, terminals, and oil pipelines, in addition to thousands of service stations, was purchased by old PDVSA, as part of the “internationalization policy” of the sector, which really meant “take the control out of Venezuela” because there is nothing more international by nature than the oil business.

That is how, in 1986, in the midst of the economic crisis in the country unleashed since the so-called 1983 “Black Friday”, the old PDVSA removed assets of the national oil industry from the control of the Venezuelan State, namely, our jurisdictional sovereignty, our control, and far from the needs of the national government, regardless of what that may be.

Its acquisition required an investment of billions of dollars from Venezuela in the United States. Although at the time the country was already affected by the serious economic crisis, the self-proclaimed oil “meritocracy”, those who controlled the decisions concerning oil policies and PDVSA, moved forward with their own plan, their own vision. In addition to the direct investment, and to make the deal “attractive” and sustain it economically, PDVSA (assuming competences granted by the Ministry of Oil at the time) gave massive discounts to the oil sold to CITGO.

In such a way, the “oil opening” and its “internationalization” led us to the absurd situation of a poor, underdeveloped country with serious economic and social issues, and to suffer a tremendous capital flight; one in which its very own oil company invested billions of dollars abroad but it also sold its oil with discounts of up to 40%, as we later determined in the “Commissioner’s Report” published in 2000.

The argument of oil “meritocracy” for this nonsense was that CITGO would give us greater relevance and presence in the US market and we would “keep our Canadian competitors at bay”. Both arguments were false. The “internationalization” began with the acquisition of the Ruh Oel refining circuit in Germany. The idea of purchasing refineries to place our oil is, at least, as outlandish as that to buy supermarkets just to place a product. In fact, the other major oil suppliers of the US market: Mexico, Saudi Arabia, and Canada, did not acquire refineries to place their oil. Additionally, the refining system in the Mexican Gulf is precisely designed to process crude oil such as the Venezuelan ones.

On the other hand, it is rather preposterous the argument of “keeping the Canadians at bay” by acquiring their oil. Once again, this is as if in order to avoid the competition to place its product in the supermarket, then one ends up buying precisely that “same” product. This was what CITGO did, it bought low volumes of Venezuelan oil, only a fraction of the existing capacity, and spent billions of dollars buying oil and products from our competitors. CITGO acted at its discretion, which was different from its alleged raison d’etre.

That was always the case, but it was just one of the secrets of “PDVSA’s black box”. Later on, with the new PDVSA that had access and control of the operations, we were able to accurately determine some of the true purposes of the acquisition of CITGO: first, to hide and transfer corporate costs to Venezuela so to avoid paying taxes in the country, where they were higher; second, to have PDVSA assets out of the control and jurisdiction of the State and the Venezuelan laws; third, CITGO was a hostage of the “oil opening” because, by acquiring assets in the US, PDVSA ensured investors that should any dispute arise with the Venezuelan State, they would always be able to “cash” or “recover” their investment with CITGO assets.

Once we had PDVSA’s audited financial statements, we managed to determine the dimensions of these operations. For example, in 2005, PDVSA spent 32 billion dollars in oil and by-product purchases from our US competitors to supply CITGO refineries and gas stations. At the same time, we ascertained that these refineries abroad never paid dividends to justify neither the amounts invested nor the discounts on oil prices.

It was only after defeating the Oil Sabotage, when we finally managed to take control of PDVSA to begin to execute our Full Oil Sovereignty offensive and to dismantle the nefarious “oil opening”, which included the so-called “internationalization” of PDVSA, as well as to sell Ruhr Oel and CITGO to refund those resources back to the country and for PDVSA to assume the tasks and responsibilities of a national oil company, subordinated to the Venezuelan State and at the service of the people, sole owner of the oil.

I was appointed Minister of Energy and Mines by President Chávez on July 17, 2002, right after the coup d’Etat. In my role as minister and member of the “Colina group”, I was at the front line of the battle for the defeat of the Oil Sabotage and the recovery of PDVSA. But it was not until my appointment as Minister of Oil and Chairman of PDVSA, on October 10, 2004, that we were able to move forward in the dismantling of the “oil opening” and to develop our own oil policy, the Full Oil Sovereignty.

President Chávez, in the heat of the defeat of the sabotage, identified, thanks to his sharp political instinct, internal resistance to the elimination of some elements of the “oil opening”, including the “internationalization”, among the very patriotic managers.

Since the end of 2004, with the full support of President Chávez, and now in my position as Minister of Oil and Chairman of PDVSA, I formed a political team of experts on the oil question, including first-class lawyers and technicians who joined me in the battle for the Full Oil Sovereignty.

Of course, we had priorities: ensuring fiscal and oil contributions to the State; defending prices before OPEC; reestablishing the production to 3.3 millions of barrels of oil per day; controlling operations, exports, and domestic market of gasoline, diesel and gas; migrating the Operating Agreements to Joint Ventures; we reestablished the value of royalties and other oil taxes; regulated the sale and control prices of oil; eliminated discounts; joined the fight against poverty and exclusion and boosted the Social Missions; nationalized the Orinoco Oil Belt and certified the reserves of 316,000 millions of barrels of oil, the highest in the world. We took control of the offshore gas, faced the international arbitrations, and began to reverse the internationalization policy.

In the development of this decision, we managed to sell the Ruhr Oel refining circuit in Germany, and we delivered that money to the Executive as an extraordinary contribution. We also managed to sell three CITGO refineries, terminals, and pipelines: Lyondell, Paulsboro and Savannah, and at the same time, we reduced the number of service stations on the US East Coast. In this way, we managed to substantially reduce the purchases of crude oil and products, corporate costs, pay more taxes and return those resources to the Venezuelan government.

The idea of selling CITGO was always surrounded by a great deal of controversy and obstacles, both legal and political. Within PDVSA and CITGO itself, there were interest groups, gathered around the Vice-presidency of Refining and that of Commerce and Supply that always opposed the sale of these assets. Despite being an order given by President Chávez and myself as a minister, they always looked for ways to attack the operations and hinder the due proceedings to comply with the law. There were, and there are, many interests concentrated in that vice-presidency: the oil trade, the handling of fuels in the domestic market, smuggling, discounts on oil sales, the purchase of naphtha, the storage abroad, the refineries, the management of CITGO, Curacao, Bahamas. We did not realize that we had a group that “dragged their feet”, as it was the oil expression of Chavismo without Chávez within PDVSA, today natural allies of madurismo.

Likewise, from the Foreign Ministry, there was a strong lobby in favor of maintaining CITGO; they argued that it would always be strategic to be “inside” the United States and, based on this presence, “influence the decisions of the US administration”. That never happened.

To us, from the Ministry of Oil, the reasons were clearer and more logical. First, CITGO represented a very poor business deal for PDVSA and the country. A deal that required vast resources of the Venezuelan State, massive discounts of oil prices that generated very high costs for the purchase of oil and foreign products. On the other hand, we are an oil-producing country, that was our core, and if we wanted to make progress in the field of refining, it should be in the national territory, along with the petrochemicals and oil upgraders. But, it was not convenient at all to have such important assets outside our national jurisdiction; conversely, it was a risk that made us vulnerable.

This was far more evident after the nationalization of the Orinoco Oil Belt, when companies such as Exxon Mobil and Conoco-Phillips, the only ones out of the 33 transnational companies, including Chevron, that did not accept our laws, resorting to international arbitration before the ICSID and the ICC, as it was stipulated in the agreements of the “oil opening” and the different “investment protection” treaties signed by the Venezuelan State.

It was clear that the transnationals wanted to obtain exorbitant compensations they pretended with the arbitrations, taking CITGO and any other asset we had abroad. However, with us, they always failed in their contentions.

During our tenure at the head of the Ministry of Oil and PDVSA, we faced arbitrations and all kinds of legal schemes by, no less than Exxon Mobil and Conoco Phillips, which we knew how to defeat. Our team, today persecuted disbanded, knew how to face these pretensions in international courts and successfully defend the most sacred interests of the country.

Once in maduro’s government, while I still was the minister of oil, president of PDVSA, and vice-president for the economic area, among the more than eighteen documents made for maduro with proposals to face the economic crisis, that was already taking worrying dimensions, there was a proposal to urgently sell CITGO.

The reasoning behind it was simple: we needed money; we needed to establish a fund to deal with macroeconomic imbalances, to bring those resources to the country. It was clear that the relationship with the US would be increasingly tense and that we were vulnerable to any action against our interests.

On the other hand, we had advanced a process of consultation with potential buyers with the assistance of a recognized European company, obtaining then, offers for 15 billion dollars with the condition of maintaining long-term contracts for supply of Venezuelan oil with the scope of not affecting in in any way our position in the market but, on the contrary, improve it.

At the time, CITGO still had three refineries: Lake Charles, Lemont y Corpus Christi, terminals, pipelines and service stations.

Maduro decided not to do anything. Despite the evidence that all political and economic factors aimed at seizing CITGO, the interests and lobbying from CITGO as well as the vice-presidency of PDVSA, who always torpedoed the process, had more power.

Moreover, maduro himself has always been convinced that in the spirit of the “Boston Group”, regardless of what he does, he will always be able to reach an agreement with the US administration. But he was wrong; he dismissed the recommendations of a team that worked with every single one of these issues with president Chávez for twelve years. A strategic error.

What is happening today is, unfortunately, the confirmation of the scenarios we warned maduro about: a foreign government, moved by political motivations, confiscates assets that belong to the Venezuelan State. Assets and resources that, maduro, in his capacity as Head of State, did not know how to protect, due to his negligence and lack of courage to defend the interests of the country.

As for what guaidó is doing with CITGO, it is not only illegal but absolutely dull. Regardless of what is said or the position one has concerning maduro, no one can take part in the confiscation of assets of the Venezuelan State by a foreign government. Much less can an executive board been appointed to administer the assets of the State, of all Venezuelans, without any kind of legal basis, accountability or control of the bodies established by the Venezuelan laws. Everything that is been done there is illegal since its inception. If the right of the burundanga has been unable to manage even the resources of a concert in Colombia, let us just imagine what it is going to happen with the “administration” of CITGO.

The “prosecutor” appointed by guaidó effectively acted as a witness in the arbitration in favor of Crystallex against the Republic, so it has been the case of another one of the great “jurists” of the most rancid right in the country in the arbitration of Exxon Mobil and Conoco Phillips against PDVSA and the Republic. It is a reprehensible behavior that reflects the deeply anti-national sentiment of the right-wing elites in Venezuela, the same that inspires the so-called “country plan” that intends to give the final blow to our battered oil industry, privatize PDVSA, and surrender the oil.

The disaster of CITGO is a clear example of how two minority sectors are willing to act against the most sacred interests of the country in order to favor their particular selfish interests and their lust for power. They weaken the homeland, leading it to the doors where their institutions disappear, their resources are surrendered, and their assets are liquidated. What it was once guaranteed of a possible future for the Venezuelan people, it is today auctioned off among crooks and incompetents, taking advantage of the demobilization and bewilderment of an oppressed people.




Soy Rafael Ramírez, ing y politico vzlano, Min. de Petróleo y Presidente de PDVSA 2002–2014. Ex-Embajador ante la ONU. Visita mi blog https://www.rafaelramirez.

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Rafael Ramírez Carreño

Rafael Ramírez Carreño

Soy Rafael Ramírez, ing y politico vzlano, Min. de Petróleo y Presidente de PDVSA 2002–2014. Ex-Embajador ante la ONU. Visita mi blog https://www.rafaelramirez.

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