Nine months after the appointment of CITGO’s board of directors, the oil subsidiary is once again accountable to its shareholders, demonstrating the importance of transparency in its management.
In the report presented to the shareholders, at its headquarters in Houston, CITGO highlights the great efforts that have been made to turn around the company – which was inherited indebted and full of challenges – into a solid and reliable corporation; and reports on the multiple and successful efforts of the Board of Directors to defend and guarantee the ownership of a key and strategic asset.
Below is the full text published by CITGO:
STRENGTHENING OPERABILITY: RECOVERY OF PERFORMANCE
Thanks to the sanitation and stability policies adopted by the Board of Directors, CITGO reported an improvement in its operations and its ability to respond to market demand. In the first half of the year, the Corpus Christi Refinery’s annual maintenance plans were successfully completed, and during the second half of the year, scheduled maintenance has been carried out at the Lake Charles and Lemont refineries. Changes in Corpus Christi and Lemont have increased refining capacity by 20,000 barrels per day.
Refinery utilization levels were also optimized, averaging up to 94% in the third quarter. In addition, CITGO increased its capacity to export finished products, representing 36% of the production of its Gulf refineries. Given the reduction in the operating capacity of the refineries in Venezuela and the need for finished products, CITGO would be able to provide such supply of products once the necessary conditions are in place. Similarly, CITGO would be able to process crude oil produced in Venezuela, thus helping in the recovery of the country’s oil production capacity.
FINANCIAL STABILITY: DEBT REFINANCE
In the first 9 months of the year, the company registered profits, being profitable in an adverse year for the U.S. Gulf refineries. In addition, 70% of the total debt of its entities was successfully refinanced, advancing in the consolidation of a positive financial balance that gives security to workers, confidence to customers, suppliers and creditors, and responds to the responsibility of maximizing the value of the company and protecting its assets to the shareholders.
CORPORATE GOVERNANCE, TRANSPARENCY AND ACCOUNTABILITY
The Board of Directors of the CITGO Entities have established a system of governance in which the shareholder is accountable each quarter and in which a process was initiated for the establishment of the best management practices controls. Thanks to this an effective reactivation of the audit, compensation and marketing committees has been achieved, as well as the selection through a transparent, open and professional process – with the help of a recognized Human Resources advisory firm – of a new Executive President, Engineer Carlos Jordá.
As part of this, CITGO’s Board of Directors has reactivated the audit, compensation and marketing committees, as well as the selection, through a transparent, open and professional process – with the help of a recognized Human Resources advisory firm – of a new Executive President, Engineer Carlos Jordá, as well as two impeccable people with extensive professional experience in the Vice Presidency of the Legal area and in the position of Auditor General, occupied for the first time by a woman.
Through these and other actions, an important improvement of the CITGO image has been achieved before financial entities, crude oil suppliers and product clients in the United States and Latin America.
AUDITS AND INVESTIGATION: DAMAGE CONTROL
Seeking to raise professional standards, CITGO’s Board of Directors has advanced, during the last months, a deep audit process, with the participation of one of the most prestigious audit firms worldwide, to improve internal controls. Likewise, an exhaustive investigation of possible irregularities in the management of past administrations is being carried out, collaborating with the investigations of the U.S. Department of Justice. CITGO’s management has been implementing several corporate decisions in favor of an honest and transparent management.
SIMON BOLIVAR FOUNDATION: SAVING LIVES AND PROVIDING HOPE
In July of this year, a license was granted by the U.S. Government to continue operating and helping Venezuelans and was renewed for one year. But the company has gone farther with the announcement of the expansion of the mission and role of the Simón Bolívar Foundation, seeking to increase the scope of its contribution thanks to the creation of an aid program, which on the one hand will strengthen the work of NGOs working to alleviate the suffering of those most affected by the Complex Humanitarian Emergency in Venezuela, and on the other hand will directly benefit those who suffer from the crisis.
The Simón Bolívar Foundation welcomed doctors, NGOs and hospitals to CITGO’s headquarters in Houston to inform about the humanitarian crisis in Venezuela and to become a platform for articulation that creates alliances among them, professionalizing their work and exponentially increasing the aid they can provide to Venezuelans. Thanks to this articulation, initiatives have arisen such as the scholarship program for non-governmental organizations to finance health projects, especially in the area of maternal and child health.
PROTECTION AND GUARANTEE: 5A GENERAL LICENSE AND OTHER LEGAL VICTORIES
After arduous negotiations, the Office of Foreign Assets Control was able to modify the General License 5 protecting CITGO from the actions of the debt creditors, as a result of the PDVSA 2020 Bond.
Similarly, in August of this year, the legality of the current corporate structure was confirmed when the Delaware Court, the body competent to review the lawsuit made by members of the previous Board of Directors, ratified the decision in favor of the current members of the Board of Directors of the CITGO Entities appointed by the President in Charge, Juan Guaidó, and the National Assembly.
Aware of the importance of this asset to the future of Venezuelans, the CITGO Board of Directors reiterates its commitment to continue working to consolidate its operational and financial soundness, continue improving corporate governance, and protect CITGO’s assets in order to be in a position to assist in the reconstruction of the country.