Venezuela offers $5 million to aid Harvey victims via Citgo

By Fabiola Zerpa and Daniel Cancel on 8/30/2017

CARACAS (Bloomberg) -- Venezuela, still reeling from a fresh round of U.S. sanctions that make it harder to raise financing in capital markets, offered $5 million to help victims of Hurricane Harvey in parts of Texas through its subsidiary Citgo Petroleum Corp.

Citgo, which operates the Corpus Christi Refinery with a capacity to process 157,000 bpd, will provide the aid to affected families through local mayors and allot a percentage of gasoline revenue to the construction of homes and shelters in and around Houston, Foreign Minister Jorge Arreaza said on state television.

“We express our solidarity with the Americans affected by the hurricane,” Arreaza said, flanked by Nelson Martinez, the head of state-run oil company PDVSA. “When an American fills his tank at a Citgo gas station, he’ll be contributing to the rebuilding of the affected communities.”

It’s not the first time that Venezuela has offered aid to downtrodden U.S. communities. Former President Hugo Chavez established an annual program in 2005 to supply subsidized heating oil to lower-income homes in the United States via Citgo. The plan has been largely phased out in recent years after oil prices crashed and Chavez’s successor Nicolas Maduro fended off street protests and an economic crisis.

Citgo says on its website that the program began in the aftermath of hurricanes Katrina and Rita and has helped more than 1.8 million people through 2014.

While it may seem odd for Venezuela to be offering aid at a time when the government’s international reserves are near a 15-year-low with looming debt payments in the coming months, part of the U.S. sanctions announced last week now prohibit any dividends from Citgo to be sent back to Caracas.

 

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