Venezuela’s PDVSA is seeking preliminary offers for its U.S. subsidiary Citgo in a deal that could net the state-owned oil company up to $10 billion.

PDVSA is selling Citgo off to alleviate the company’s cash crunch as it pays down debt from China.

Most of Venezuela’s oil is used for heavily subsidized domestic consumption and to pay down debt, sales made by Citgo in the U.S. are one of PDVSA’s few sources of true revenue.

The Venezuelan government denies the company is under financial pressure.

Louisiana-based investment bank Lazard has been tapped to handle the sale. Lazard has sent out offering materials to potential buyers, the New York Times said.

Venezuela’s Oil Minister and CEO of state owned PDVSA Rafael Ramirez said earlier this month that Venezuela wants to divest from Citgo “as soon as we receive a proposal that serves our interests.”

Houston-based Citgo is the American refining, transporting and marketing arm of PDVSA.

Citgo has three refineries in the United States with a combined capacity of about 750,000 barrels per day. It also owns 48 oil terminals and operates 6,000 gas stations.

The refineries are in Lemont, Illinois, Lake Charles, Louisiana and Corpus Christi, Texas.

Citgo also fully owns three U.S. pipelines and holds stakes in six others.

It could be difficult for Citgo to offload its two heavy oil refineries as U.S. refiners turn to domestic light crude to boost profits, Reuters said.

Bidders will be able to buy the assets piecemeal and are not obligated to make bids on all of the company’s holdings.

Antitrust issues could also stand in the way of Citgo receiving a single bid for all its assets.

No official bids have been disclosed yet.

PDVSA has also tapped Deutsche Bank to help sell its 50 percent stake in the Chalmette, Louisiana refinery it owns with ExxonMobil.

Last month, U.S. congressman Joe Garcia of Florida urged President Obama to block the sale of Citgo because it would be against “vital national interests” and be used for “nefarious objectives.”


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