PDVSA'S possible sale of CITGO and the subsequent ramifications on US foreign and energy policy

PDVSA seems poised to sell CITGO in the very near future. The United States and Venezuela have already begun to implement shifts in national behavior and policy, suggesting that they are expecting this transition within the next couple of years. Although nothing is guaranteed until after the Venezuelan presidential election of 2012, if President Chavez retains his grip on power past that point, expect CITGO to be sold by the year 2014, if not shortly thereafter. If the US Congress decides to impose CISADA sanctions on Venezuela or declare it a state sponsor of terrorism, CITGO could be sold significantly sooner. However, such legislative action seems unlikely. A move to sell CITGO would have far-reaching ramifications for both countries' energy and foreign policies. This restructuring of energy geopolitics could potentially lead to more conflicts in the international arena. With significantly less economic leverage on each other, the United States and Venezuela would be free to harden their rhetoric and policies.

► CITGO is no longer a profitable company.
► Worse still, it is in a considerable amount of debt.
► CITGO will be sold after the Venezuelan presidential of 2012 and the Panama Canal renovations of 2014.
► CITGO's sale will significantly change the geopolitical orientation of the United States and Venezuela.
► With the completion of the Keystone XL pipeline, the United States will be ready for the end of Venezuelan oil.
► The US Congress probably not impose CISADA sanctions on Venezuela, or declare it a state sponsor of terrorism.