Asdrubal Chavez, chief executive of Houston-based Citgo Petroleum Corp, boarded the Venezuelan-owned firm’s corporate jet in Caracas on Jan. 30, 2019.
Upon landing in the Bahamas – where Chavez has worked for about a year after being denied a U.S. visa – he had received word from Houston that it would be his last trip on a company plane and that his Citgo email account had been shut off.
Day-to-day control of the company had passed to Citgo’s top U.S. executive, Rick Esser, who with the backing of Venezuela’s rising political opposition and the U.S. government would begin clearing the way for a new, anti-Maduro board of directors at Citgo.
Esser oversaw the moves to isolate Chavez – a cousin of the late Venezuelan President Hugo Chavez – and would soon start ousting other Citgo executives close to the Maduro administration.
The account of the transition of power at Citgo is based on Reuters interviews with more than a dozen current and former Citgo and PdVSA executives, employees, and U.S. and Latin American advisors.
But Maduro remains in control of the military and PdVSA, making Citgo the obvious first target among national asset for Guaido’s opposition movement to claim, with the help of the U.S. government.
The battle for Citgo could prove pivotal in the effort to unseat Maduro because full control of a major U.S. refiner would provide a crucial source of revenue to a post-Maduro administration.
Citgo, with more than $23 billion in annual sales and operations that supply about 4% of U.S. fuels, may be the last remaining asset owned by PdVSA with a healthy balance sheet.
Esser assumed responsibility for day-to-day strategic decisions and operations while a search for a new CEO has begun, it said, without mentioning former CEO Chavez.
It is unclear whether Chavez has yet been formally terminated, an action that can only be taken by company directors, but he has been effectively shut out of the firm, Citgo employees said.
Esser has essentially run the company since Chavez’ ouster, in close consultation with U.S. government officials, according to three Citgo employees and two people close to the incoming company board.
Since clearing Citgo’s upper ranks of Maduro allies, Esser has focused on securing alternatives to the Venezuelan oil that feeds its refineries.
Recent U.S. sanctions prevent the firm from importing Venezuelan crude after April 28, which could cripple the company unless it can ensure it has the cash, credit and contracts for alternate supplies.
Opposition leaders had difficulty recruiting candidates willing to join the new Citgo board, according to three people familiar with the recruitments.
In late 2017, six Citgo executives were called to Caracas and jailed amid a graft probe over a failed debt refinancing. Their detention led to Chavez’s appointment as CEO and the arrival of several Maduro loyalists at Citgo’s Houston headquarters.
New Citgo Chairwoman Palacios has been huddling with newly appointed directors and legal advisers to guard against the threat of a potential U.S. court challenge by PdVSA to the new board’s legitimacy, according to two sources close to her team.
One of their priorities will be to audit the finances of a refinery project in Aruba, said the two people close to Palacios. PdVSA and Citgo agreed to a $685 million overhaul of the idled facility in 2016.
Last week, Citgo Aruba Refining officially put the money-losing venture on hold and laid off workers, citing the impact of U.S. sanctions on PdVSA.
The project has been clouded by corruption allegations, according to four former and current Citgo employees and two people close to the new Citgo board.
Since Esser took over Citgo operations, the company has sent clear signals of a return to its century-old American roots.
For years, the hallways have been decorated with renderings of a controversial painting of Latin American independence leader Simon Bolivar that had been commissioned by former president Hugo Chavez.
Now, the portraits began to disappear, Citgo employees said, soon after Venezuela’s congress appointed the company’s new board of directors.
Reuters / ABC Flash Point Oil News 2019.