CITGO Reports Results for FY 2019

HOUSTON, April 6, 2020 /PRNewswire/ -- The CITGO Petroleum Corporation Board of Directors recently reviewed the Company's 2019 annual financial results with the PDVSA Ad Hoc board. The Company's steady financial and operational performance includes $246 million in net income for the year, a strong liquidity position and debt-to-capitalization ratio, and one of the company's best years of safety and environmental performance, resulting in recognition for the Corpus Christi and Lemont refineries. These results were achieved despite a number of one-time, special items and a deteriorating market environment for refiners.

"While the COVID-19 pandemic and resulting market turmoil present a new layer of challenges for our industry, CITGO's increased resilience and flexibility positions us to manage the difficult economic and market environment for the remainder of 2020," said CITGO Board Chair Dr. Luisa Palacios. "We have taken important steps to improve our balance sheet, strengthen liquidity, and implement management controls that will serve us well in the months and years to come."

President and Chief Executive Officer Carlos Jordá also pointed to CITGO's strength and resilience, "The people of CITGO rose to the challenge in 2019 as they continued to make and sell the quality fuels and lubricants our customers expect from our brands, and they continue rising to the challenge today as we do the same while responding to the COVID-19 environment." Jordá also underscored CITGO's commitment to corporate governance, "I am particularly proud of the significant strides we've made in improving corporate governance, as we continue to emphasize the importance of ethics and integrity throughout the company."

Additional items of note include:

    --  Refinery Runs. CITGO's three refineries continued to run at high
        capacity. Total refinery throughput for 2019 was 800,000 barrels-per-day
        (bpd), of which crude runs were 688,000 bpd, utilizing 89% of the rated
        crude refining capacity.
    --  Market Environment. Crude oil market conditions also weighed on
        refiners. The adverse market environment in 2019 resulted from a 50%
        reduction of certain domestic crude discounts relative to 2018 resulting
        from the completion of several large pipelines from the Permian Basin to
        the Gulf Coast. More importantly, light to heavy crude differentials
        significantly narrowed in relation to 2018 due to heavy crude supply
        reduction, partially resulting from Venezuelan oil disruptions and
        Canadian crude curtailment.
    --  Investments and Maintenance. The Company invested $280 million in
        capital projects and $442 million in turnaround maintenance and catalyst
        during 2019.
    --  Exports. Exports continued to play an increasing role. For full year
        2019, refined product exports totaled 194,000 bpd, just slightly below
        2018 due to the significant turnaround work at the Corpus Christi
        Refinery in Q2 with exports ramping up to 226,000 bpd in Q4.
    --  Awards and Recognitions: Committed to its core values of safety and
        environmental, CITGO refineries received two recognitions in 2019. The
        Lemont refinery received the AFPM Elite Gold Safety Award in recognition
        of top industry safety performance and excellence in program innovation
        and leadership over time. Additionally, the Corpus Christi refinery
        earned the 2019 ENERGY STAR designation from the Environmental
        Protection Agency (EPA).
    --  Corporate governance. The company continues to expand and
        institutionalize measures to strengthen corporate governance with the
        appointment of a new Chief Compliance and Ethics officer with enhanced
        responsibilities, as well as updating its company-wide Code of Business
        Ethics.
    --  Special items. Several one-time items that impacted our financials took
        place in 2019, principally a $60 million inventory write-down due to an
        unlawful and forceful taking in Venezuelan waters of that amount of
        crude oil owned by the Company aboard the tanker Gerd Knutsen on Feb. 9,
        2020 and the tanker's failure to depart Venezuelan waters for
        approximately one year despite the Company's instructions to depart.
        Other items included a $30 million write off of insurance receivables
        related to the 2006 heavy rain event at the Lake Charles refinery for
        coverage placed through PDVIC, an insurance entity controlled by PDVSA
        in Venezuela forced into liquidation in 2018; and a $24 million charge
        representing the company's share of industry-wide class action
        settlements related to tractor hydraulic fluids litigation. These were
        partly offset by a $31 million benefit to earnings from dipping into
        less expensive historical LIFO inventory layers and a $21 million
        benefit from insurance reimbursements related to Athos litigation.

About CITGO:

Headquartered in Houston, Texas, CITGO Petroleum Corporation is a recognized leader in the refining industry with a well-known brand. CITGO operates three refineries located in Corpus Christi, Texas; Lake Charles, La.; and Lemont, Ill., and wholly and/or jointly owns 43 terminals, five pipelines and three lubricants blending and packaging plants. With approximately 3,500 employees and a combined crude capacity of approximately 769,000 barrels-per-day (bpd), CITGO is ranked as the fifth-largest, and one of the most complex independent refiners in the United States. CITGO transports and markets transportation fuels, lubricants, petrochemicals and other industrial products and supplies a network of approximately 4,700 locally owned and operated branded retail outlets in 30 states and the District of Columbia. CITGO Petroleum Corporation is owned by CITGO Holding, Inc. For more information, visit www.CITGO.com.

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SOURCE CITGO Corporation