Hungry for cash at home, Venezuela’s oil company to sell stake in Louisiana refinery

Facing a cash-crunch, Venezuela’s state-run PDVSA oil company said it plans to sell its 50 percent stake in the 189,000-barrel-per-day Chalmette oil refinery on the outskirts of New Orleans.

PDVSA said the details of the sale “were proprietary” but New Jersey-based PBF said it will pay $322 million for the refinery and other installations, including pipelines.

The refinery is a joint venture between affiliates of PDVSA and ExxonMobil and its sale requires regulatory approval. But PDVSA said a change in control would likely come before the end of the year.

“The decision to sell Chalmette is in line with the priorities we have to exit assets that are non-strategic and not aligned with the commercial policies of the company and the country,” Jesus Luongo, PDVSA’s vice president for refining, trade, and supply, said in a statement Thursday.

The refinery, which is located eight miles east of New Orleans, is a dual-train coking refinery capable of handling both heavy and light crude.

The move comes as Venezuela has been scouring world markets for loans and investments that might help it overcome an economic crisis, which features record high inflation and shortages of basic goods. International reserves have fallen 26 percent this year to $16.4 billion — a 12-year low, according to Reuters.

Last year, the country floated the idea of selling Citgo Petroleum Company, which runs filling stations and refineries in the United States, but those plans, apparently, fell through early this year.

Petroleum represents about 98 percent of all of Venezuela’s exports, and PDVSA’s coffers have been used to finance popular social programs. As the country heads into key legislative elections this year, keeping those programs funded will likely be a priority.

This story was originally published June 18, 2015 at 6:56 PM with the headline "Hungry for cash at home, Venezuela’s oil company to sell stake in Louisiana refinery."