Slack Stock – Citgo Petroleum posts fourth quarter net loss of $255 million
HOUSTON (Reuters) -Eighth-largest U.S. refiner Citgo Petroleum Corp on Friday reported a wider $255 million fourth quarter loss as slack demand for fuel and higher costs crushed margins last year.
Most U.S. refining companies in 2020 suffered deep losses and four facilities halted operations as the COVID-19 pandemic sharply cut fuel demand and sales. Average U.S. gasoline consumption fell 13% last year with gasoline and diesel prices hitting a four-year low, according to government figures.
Citgo, the U.S. refining arm of Venezuela’s state oil company PDVSA, split from its parent in 2019 after Venezuela’s opposition-led Congress appointed new executives and Washington imposed the tighter sanctions on PDVSA, which had been the source of most of its crude and the receiver of a big portion of its fuel output.
“Our ability to persevere – through the COVID pandemic, hurricanes and the recent severe winter storm with widespread utility outages – and still enhance our operational performance, safety and corporate governance is again a testament to the dedication and professionalism of all our employees,” Chief Executive Carlos Jorda said in a statement.
The company did not say why it released results more than a month after it traditionally has. Spokespeople did not immediately reply to a request for comment. Its year-ago loss for the fourth quarter was $24 million.
Citgo reported a full year loss of $667 million, compared with a profit of $246 million in the prior year.
It has filed for a $550 million U.S. tax refund based on 2020 losses, the company said. Cost-cutting and debt refinancing allowed it to end the year with strong cash and liquidity positions, the company said. It did not disclose figures.
Refinery throughput last year was 638,000 barrels per day (bpd), compared with 800,000 bpd the prior year. Processing fell due to the COVID-19 pandemic and a shutdown at Citgo’s Lake Charles refinery in Louisiana due to two hurricanes, the company said.
Citgo last year raised about $250 million by selling accounts receivables and refinanced debt to push maturity dates on about $650 million in borrowings back four years, to 2026, reducing the financial strains from the fuel market decline.
PDVSA creditors are trying to claim shares in Citgo’s parent companies over unpaid debts by the Venezuelan government. A U.S. court has backed the claims, but a share auction that could see the U.S. operation sold has been barred by U.S. executive orders protecting the company.
Reporting by Gary McWilliams in Houston and Marianna Parraga in Mexico CityEditing by Marguerita Choy