This will bring in cash for the short term, but hurt Venezuela's oil income long term.
Venezuela's strategy is to get out of non-profit businesses in the USA Bloomberg is reporting that Venezuela's President Hugo Chavez Frias, speaking in Buenos Aires (Argentina) has said his government may sell eight US refineries as part of a strategy to reduce Venezuela's economic dependency on sales to the United States. … "Not one Venezuelan works at these refineries ... they don't give us one cent of profit ... they don't pay taxes in Venezuela ... this is economic imperialism.''
Citgo's refineries are engineered to process sulphur-laden Venezuelan heavy crudes If Chavez eventually suspends oil exports to the United States, Citgo's new owners would have to find alternative supplies. These could come from Russia, Saudi Arabia or Mexico. However, while some Russian and Saudi crude oil contains a lot of sulphur, it is not as heavy as the Venezuelan crudes that Citgo's refineries are engineered to process.
Sour crude oil sweetens profits for refineries Like bartenders putting cheap alcohol into their cocktails, some U.S. refiners are reaping huge profits by using lower quality crude oil to make everything from gasoline to diesel.
The difference is that, unlike martinis mixed with barnyard booze, these finished fuels, after a little extra work, are the same quality as those made with top-shelf ingredients and therefore fetch the same high price from consumers. But the initial cost per barrel is $7 to $17 cheaper. … Depending on the precise chemical composition, lower quality oil is selling at discounts ranging from $7 to $17 per barrel, when compared with light, sweet crude. A year ago, heavy, sour crudes, whether from Mexico, Venezuela or Canada, were discounted by about half that much. "The sweet-sour spreads have never been this good," said Gene Edwards, senior vice president of supply and trading at San Antonio-based Valero Energy Corp., the nation's largest independent refiner and the leading processor of sour crude.