Exclusive: PDVSA seeks bids for Citgo in potential $10 billion deal - sources

NEW YORK (Reuters) - Venezuela's state-run oil company PDVSA is seeking preliminary offers for its U.S. unit Citgo Petroleum by the end of September, a deal that could fetch up to $10 billion, according to people familiar with the matter.

Investment bank Lazard Ltd , which is running the sale process for Citgo on behalf of PDVSA, has sent offering materials to potential buyers, the people said, asking not to be named because the matter is not public.

PDVSA also has a 50 percent stake in the Chalmette refinery in Louisiana alongside Exxon Mobil Corp , which owns the remainder. The Venezuelan oil company has tapped Deutsche Bank separately to explore a sale of its stake in that refinery.

The assets being offered as part of the Lazard process have annual earnings before interest, taxes, depreciation and amortization (EBITDA) of around $1.5 billion, the people said.

Citgo's assets, the core of which are three refineries with combined capacity of 749,000 barrels per day (bpd), could fetch between $8 billion and $10 billion, the people said.

Bidders can put in offers for individual assets, which include refineries, terminals, storage and wholesale operations, the people added.

Representatives for Lazard could not be immediately reached for comment, while PDVSA and Citgo did not respond to requests for comment.

Venezuela's Petroleum Minister Rafael Ramirez said last month that the country will look to exit Citgo "as soon as we receive a proposal that serves our interests."

A sale, if it were to come to fruition, would be Venezuela's biggest pullback ever from the U.S. refining market.

Citgo's three U.S. refineries are in Lemont, Illinois; Lake Charles, Louisiana; and Corpus Christi, Texas. Citgo also has 48 terminals.

Logical bidders for the refineries could include HollyFrontier Corp , Valero Energy Corp , Western Refining Inc , Tesoro Corp and PBF Energy Inc , people familiar with the matter said.

However, it may be difficult to find a single buyer for all of Citgo's assets as two of the refineries are geared to run heavy crudes from Venezuela and U.S. refining companies are trying to maximize profits by buying cheap domestic light crudes, refinery experts have told Reuters.

Beyond the sheer size of the deal and the attractiveness of the assets, antitrust issues could prohibit some bidders if they were to pursue a bid for all the assets, according to people familiar with the process.

(Reporting by Mike Stone in New York; Editing by Cynthia Osterman)

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