Champlin and Venezuela Oil Firm in Deal

The state oil company Petroleos de Venezuela SA has signed a letter of intent to acquire a 50% interest in Champlin Petroleum Co.’s refinery at Corpus Christi, Tex., for an undisclosed price.

According to a statement from PDVSA, the state firm will supply up to 160,000 barrels a day to the plant, from which Champlin supplies refined products to 10 Southern U.S. states. the purchase will also include access to Champlin’s marketing and distribution system, PDVSA said.

According to PDVSA, Champlin’s refinery is capable of absorbing up to 100,000 barrels a day of heavy crude oil. Heavy crudes account for about 70% of Venezuela’s crude exports and half of all of the country’s oil exports.

The purchase is part of a continuing PDVSA program to acquire interests in marketing and refining companies overseas. Through the so-called internationalization program, Venezuela hopes to assure markets for its crude and increase PDVSA’s involvement in the downstream portion of the industry.

Earlier this year, PDVSA signed a letter of intent to buy 50% of Citgo Corp.’s petroleum refining and marketing operations in the United States at a cost of $300 million. Previously, the state firm had spent a total of $90 million on similar investments in West Germany’s Veba Oel, Sweden’s Nynas and Steuart Petroleum.

With the Champlin acquisition, PDVSA will have guaranteed markets for up to 587,000 barrels a day of oil exports.