Citgo announces move to Houston

Aided by $35 million in financial incentives from the city, relocation from Tulsa carries with it 700 jobs

Clayton Bellamy

Associated Press Business Writer

Citgo Petroleum Corp., aided by $35 million in financial incentives, will move its headquarters from Tulsa, Okla., to Houston, Texas, to be closer to its customers and its assets, the company announced April 26.

Luis Marin, Citgo’s president and chief executive, said strategic and operational concerns were more important than the incentives from Texas officials in the decision to take about 700 jobs to Houston.

About 300 jobs, in research, information technology, pipelines and accounting, will remain in Tulsa, where Citgo has been based since 1983. The move will take about two years.

“The energy business is the cornerstone in the state of Texas and the city of Houston,” Marin said. “When combined with Citgo’s people, resources and assets, I feel confident that this relocation will propel the company to the next level of success.”

Citgo’s parent company, Petroleos de Venezuela SA, is transferring management of all its U.S. assets, including refineries in Texas, Louisiana and St. Croix, to Citgo, Marin said.

Moving to Houston will put Citgo nearer those assets and its procurement business, PDV Services, and about 99 percent of the customers and suppliers of PDVSA, Venezuela’s national oil company, Marin said.

Citgo will receive a $5 million grant from the state of Texas and $30 million in loans with interest rates below 1 percent from the cities of Houston and Corpus Christi, where Citgo has a major refinery, Marin said.

“This decision was not based on economics,” Marin said.

Citgo is also adding 120 jobs to its Corpus Christi refinery as part of an $828 million expansion that will allow the plant to make two new types of low sulfur fuel.

Citgo first announced in August that it was considering the move to Houston, home to the headquarters of many of the nation’s largest oil and gas companies.

The decision was delayed three times before the April 26 announcement as the company negotiated with Texas economic development officials. The move seemed imminent earlier this month when Citgo hired an executive from Houston’s chamber of commerce.

Tulsa was known as the oil capital of the world in the first half of the 20th century after oil was discovered nearby near the turn of the century. But the reserves have been depleted and major oil companies moved Tulsa offices to Houston.

Citgo, the nation’s fourth largest retailer of gasoline with 13,500 outlets, employs about 4,300 workers. It also operates three oil refineries in the United States and owns a 42 percent interest in another refinery in Houston.