Citgo to Cut Refinery Jobs

HOUSTON -- Lyondell-Citgo Refining LP, a joint venture between Citgo Petroleum Corp. and Lyondell Chemical Co., is laying off contract workers at its Houston plant and preparing further production cuts as it operates at 50 percent of capacity because of a shortage of crude supplies from strike-afflicted Venezuela.

Lyondell-Citgo executives and officials of the union representing workers are scheduled to meet on Monday to discuss effects of the 40-day-old strike in Venezuela on plant operations, according to Reuters. Venezuela normally supplies about 13 percent of the United States' crude imports.

The cuts were directly related to the lack of supplies from Venezuela, the world's number-five crude exporter, the report said. A Lyondell-Citgo spokeswoman did not return calls, according to the report.

It is unlikely layoffs of union workers will be discussed at Monday's meeting between refinery executives and leaders from Local 4-227 of the Paper, Allied-Industrial, Chemical and Energy Workers International Union, one source said, but cancellation of bonus pay and other financial benefits may be discussed.

The national agreement between PACE and refining companies carries assurances of job security for union members while a refinery is operating. The refinery, which has a crude oil processing capacity of 270,000 barrels per day (bpd), halved its production late last month because the supply of sour crude oil from Venezuela has been cut off by the general strike in that country.

The refinery has crude oil supplies to run at 50 percent capacity through the end of February. Late February may be a critical time for the refinery if the flow of sour crude from Venezuela does not resume, the report said. They declined to say what options refinery executives have to cut costs after releasing 300 to 400 contract workers from the plant.

The Houston refinery is the hardest hit in the United States by the ongoing political crisis in Venezuela because one of its crude units is specifically configured to handle the sour crude oil produced from Venezuelan fields. That crude unit accounts for half the plant's crude oil throughput. No replacement crude has been found that can successfully run in that unit, sources have told Reuters.