(Bloomberg) -- Citgo Petroleum Corp., the U.S. refiner owned by Venezuela, is avoiding a total shutdown after the U.S. Treasury extended its license to engage in business with U.S. persons and companies, a step that’s fundamental for the Houston-based company to continue to operate.
Without the extension, operations at Citgo, which is now under the administration of the opposition in Venezuela led by Juan Guaido, would grind to a halt, as the company wouldn’t be able to sell fuels to U.S. companies or even buy a pen from a U.S. person. That would threaten to cut off about 4 percent of American fuel-making capacity.
The extension of the deadline was expected and will allow Citgo to “operate profitably without too much trouble,” Rice University’s Francisco Monaldi, a Venezuelan-born expert on energy politics, said in a phone interview Friday.
Under a set of sanctions released at the end of January, Citgo -- which at the time was indirectly controlled by the government of embattled president Nicolas Maduro -- had an authorization to interact with U.S. companies or persons until July 27.
The deadline was extended for 18 months after a team appointed by Venezuela’s National Assembly leader Guaido officially took the reins of the company in February, according to a general license issued by the Treasury Department’s Office of Foreign Assets Control.
Citgo operates three refineries in the U.S. with combined capacity to process almost 755,000 barrels of oil a day, or about 4 percent of the U.S. fuel-making capacity. It operates more than 40 petroleum terminals in the U.S. and sells fuels to 5,300 Citgo-branded gas stations.
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