Citco changes hands

July 28, 2005 by admin · Leave a Comment
Filed under: Business and Economy, Oil Industry 

The Citco Group, which administers $250 billion of hedge fund assets globally and serves as custodian to $140 billion of hedge fund assets, has announced a new ownership structure.

The previous majority owner, the Sandoz Family Foundation, has sold a controlling stake in the firm to a group of investors including the Smeets Family Trust, Citco managers and “friends of the firm”, as a spokesman puts it. The Sandoz family, which made a substantial investment into the firm in 1995, will remain a minority owner and keep a seat on the board.

CEO Christopher Smeets will continue in his role heading the company, and expressed pleasure that the firm remains independent.

Silverpoint Capital led the debt financing for the transaction, while Morgan Stanley served as advisor to the Smeets Family Trust and Goldman Sachs International advised the Sandoz family.

The Sandoz Family Trust was established in 1964 by the sculptor and painter Marcel Edouard Sandoz, the son of the founder of pharmaceutical company SA Sandoz of Basel (now Novartis).

Citco got its start 60 years ago in Curacao and now provides corporate trust and administration in 27 European, Caribbean, Australasian and Indian Ocean districts. It was founded by the predecessor of the Smeets Family Trust.

Source: FinanceAsia

Oliver L. Campbell: PDVSA�s internationalization policy has been largely vindicated oil industry commentarist Oliver Campbell writes: The Venezuelan government has described �internationalisation� as a great mistake which has only produced losses for the country. The word refers to PDVSA�s purchase (or lease) of assets abroad which started in the early 1980s … just a few years after nationalization. These downstream investments were made in refineries in Germany in partnership with Veba Oil, in Sweden, Belgium and the United Kingdom in partnership with Fortnum, in mainland USA (CITGO), and the Virgin Islands (HOVENSA) in partnership with Amerada Hess. The Curacao refinery was leased from the Curacao government for a number of years.

The acquisition of refinery capacity was a defensive strategy designed to protect the sales of heavy crude oil at a time when these crudes could only be sold by giving large discounts on light oil prices. It was envisaged the refineries would process Venezuela�s predominantly heavy crude oils and assure an outlet for a substantial volume.

The developments of these investments can be summarized as follows:

a) Ruhr Oil. The initial investment was made in 1983 and the netback deal was moderately successful in the early years, particularly when the DM was strong against the US$. However, the German refineries were never modified to take a heavy crude input, and a swap arrangement was made with the Russians … they delivered light oil to the German refineries and PDVSA delivered heavy oil to Cuba.

This went fine until the Russians terminated sales to Cuba. Thereafter, PDVSA has purchased light crude oil, which gives a much better product yield, in the Rotterdam spot market. Also the latter�s closeness to Germany greatly reduces the freight cost. Since then, the deal has not been a money maker, but the fact is the investment has been overtaken by events since CITGO can now process all the heavy oil PDVSA chooses to sell it. The investment is thus redundant and the government have been trying to sell it for at least three years. They stated some time ago that Alfa was an interested buyer, but we have heard no more about that since.

b) Nyn�s Petroleum. The investment in the two refineries in Sweden and two small refineries in the UK was made in 1986. It has been reasonably successful and provided an outlet for the sale of the heavy Boscan crude. From this it produces naphthenic lubricants which are sold world-wide and it also sells asphalt for road paving throughout Europe.

The company is of no strategic interest, and it was thought PDVSA would sell it, probably to its partner Fortum. However, to our surprise, we now learn PDVSA and Nyn�s are considering the formation of a joint venture in China.

c) CITGO Petroleum. Investment in various refineries in the USA commenced in 1986. The government has said CITGO only made profits because PDVSA sold them oil at below market (spot) prices. They have considered selling some or all of its refineries. In particular they said the Lemont refinery in Illinois should be sold, even though it is making a good return, for the sole reason that it purchases its oil from the Canadians rather than PDVSA.

However, CITGO at present is making substantial profits for PDVSA because a) under the pricing formula, PDVSA sells them oil at some $5 a barrel above spot prices, b) CITGO is exploiting the amazing differential between heavy and light oil crude prices (an average of $17 per barrel in the 1st quarter 2005), and c) gasoline prices at the pump in the USA are at the highest levels on record.

d) Hovensa. Investment in the refinery in the Virgin Islands was made in 1998. Little has been said about this investment in the Virgin Islands except to stress that all investments abroad are being analyzed to determine if they should be retained.

e) Curacao refinery. This refinery was leased from the Curacao government in 1986. It had formed part of Shell�s refinery system together with the Cardon refinery on the Paraguana Peninsula in Venezuela. The refinery was built in 1914, though since updated, and declared obsolete in 1982. The emissions produce a health hazard to those living in Willemstad and there has been pressure to shut it down. The Venezuelan oil minister has recently announced its continued lease is under study. However, the refinery employs over 1,000 people in Curacao and the decision, I believe, will have more to do with politics than economics.

It is intriguing how circumstances have changed and �internationalization� … particularly the CITGO investment, now shows considerable benefits. It seems the government is having second thoughts about disposing of both Nyn�s and CITGO.

CITGO paid dividends of US$400 million in 2004 and should pay at least the same in 2005. President Chavez has announced that oil sales to CITGO will finance social programs in the Venezuelan Agrarian Corporation, the Agricultural Supply & Services Corporation and the Mercal chain of food stores … the latter subsidizes food prices by up to 40% on normal supermarket prices.

Source: Venezuela

Gas to rise by 10 cents this week

July 14, 2005 by admin · Leave a Comment
Filed under: Business and Economy, Oil Industry 

Motorists hurting by the already high price of gasoline in New Providence will have to further pinch pennies as the pump price is expected to shoot up by an average of 10 cents to $3.73 a gallon later today or Friday.

Worse yet, driving is expected to become even more expensive in another two weeks as Trade and Industry Minister Leslie Miller said Wednesday that higher gas prices are inevitable at month’s end and into August. Drivers could be paying as much as $4.05 for a gallon here and about $4.50 in the Family Islands.

Presently, unleaded gasoline in New Providence is selling at Esso at $3.59. At Texaco, the price is $3.64 and at Shell, $3.69.


Our oil reserves do not belong to Bush: Chavez

March 8, 2005 by admin · Leave a Comment
Filed under: Business and Economy, Oil Industry 

BANGALORE, India: Venezuelan President Hugo Chavez on Monday accused the United States of planning to portray his country as a security threat in order to capture its vast oil reserves.

“We are just waiting for the United States to announce next that Venezuela has weapons of mass destruction,’’ Chavez said in a speech in the southern Indian city of Bangalore. Chavez _ who has repeatedly accused US President George W Bush of plotting to assassinate him, a charge Washington denies _ said US officials have called him “a threat’’ and a “destabilizing force’’ because they want an excuse to gain control over Venezuelan oil reserves.

The Latin American country is the world’s fifth largest oil producer with a daily output of three million barrels. It is a major US supplier of oil and gas. “The United States government would very much like to keep all our oil for itself,’’ Chavez said. “But our oil reserve does not belong to Bush. The oil belongs to the Venezuelan people.’’ On the first-ever visit to India by a Venezuelan leader, Chavez has criticized the United States throughout his four-day sojourn. The former paratrooper also took a shot at Washington over the US-led invasion of Iraq.

“They went to Iraq thinking they will control Iraq’s oil reserves … but I doubt very much they will ever control that country,’’ he said. Relations between the United States and Venezuela have deteriorated steadily since Chavez took office in February 1999. The self-proclaimed “revolutionary’’ maintains close ties with Cuba’s Fidel Castro. On Friday, Chavez said his country would cut off oil supplies to the United States if Washington tries to “hurt’’ his country.

“We want to supply oil to the United States… (But) if there is any aggression, there will be no oil,’’ he warned. Chavez called his India trip “an intense experience and a great success.’’ The two countries signed agreements to work together in energy, high technology, transport and space.

The News International, Pakistan

1st Curaçao oil symposium

August 25, 2004 by admin · Leave a Comment
Filed under: Events, Oil Industry 

On monday, August 23, the first Curaçao oil symposium has been held. Various guest speakers from Curacao and Holland informed the public regarding the factors that influence the oil prices. Curoil has recieved many positive reactions. Especially the clear explanations given by the guestspeakers has been appreciated by the public.

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