Houston puts in effort to snare Citgo headquarters

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Houston steps up effort to snare Citgo headquarters

By RALPH BIVINS

Copyright 2004 Houston Chronicle

Top officials with Citgo Petroleum Corp. are in Houston this week as the courtship heats up to bring the oil company's corporate headquarters to Texas.

While the oil company will only say Houston is still very much a player in this high-stakes battle, Gov. Rick Perry has invited Citgo CEO Luis Marin to the Super Bowl, a Citgo spokesman said.

The decision time in a corporate tug of war with Tulsa appears to be near.

"At this time, we are waiting for the state of Texas' proposal," said Antonio J. Rivero, executive vice president of Citgo. "It's important to clarify, it's not a done deal."

The winning city gets 1,000 high-paying jobs and a corporate tenant that will fill a huge amount of office space -- between 250,000 and 300,000 square feet.

Also, as part of the deal, Citgo has said it will spend billions to double its refining capacity in Texas.

"We've been in discussions with Citgo. But it's at the point now where an incentive package must be finalized for Citgo to make a decision," said Pamela Lovett, president of the economic development division of the Greater Houston Partnership. "It's a tremendous opportunity for Houston and the state of Texas."

The decision is going to be weighed against the economic incentives that will be offered by government officials in Texas and those in Tulsa, where Citgo has its headquarters.

A spokeswoman for the governor's office declined to comment.

Perry has made corporate recruiting a priority and has $295 million in an economic development fund to pursue prizes like Citgo.

Citgo is expecting to receive a proposal outlining the incentives from the governor's office in February, Rivero said.

The merits of staying in Tulsa or moving to Houston will then be reviewed by the board of directors of Citgo and the board of its parent company, Petroleos de Venezuela, the national oil company of Venezuela.

If Houston is selected, Rivero said he would like to have Citgo employees moving from Oklahoma by this summer to avoid disrupting employees' children who are in school.

The firm anticipates 500 to 700 employees would be relocated from Tulsa to Houston. Citgo would build its Houston staff to about 1,000 by hiring additional people locally.

As part of the package, if Houston is selected, Citgo would agree to spend $2 billion over 10 years to expand its chemical plants in Texas, Rivero said. Citgo owns an interest in a refinery in Pasadena and and is sole owner of a refinery in Corpus Christi.

Citgo officials have been conducting a careful study of the Houston office market.

Rivero said the firm has considered four buildings for a new headquarters: the 64-story Williams Tower, the Aspen Technology building in west Houston, a BMC Software building on the West Belt and the 1500 Louisiana building, formerly known as Enron Center South.

Citgo employs about 4,000 people, with 1,000 of them in Tulsa.

Citgo markets gasoline through 13,400 service stations across the nation. It has two asphalt plants on the East Coast, and a large refinery in Lake Charles, La.

After the firm announced last fall that it was studying a possible move, Citgo received overtures from officials in New Mexico and Louisiana, Rivero said. But he said Houston is the only option being considered as a relocation site, and a feasibility study has shown Houston to be outstanding.

Relocating is expensive, he said, and if the state of Texas' offer is not sweet enough, Citgo officials will reject it, Rivero said.

"We are fine in Tulsa. We have been in that location for 20 years. We have an excellent relationship with our employees," Rivero said.

And not everyone is excited about the prospect of moving to Houston.

The Paper, Allied-Industrial, Chemical and Energy International Workers Union has been lobbying economic developers and elected officials to keep Citgo from moving its corporate headquarters to Houston unless it can get its problems resolved with the Lyondell-Citgo Refinery in Houston, where about 500 union-represented employees work.

Jim Lefton, international representative for PACE in Houston, said he met for two hours Friday with the Venezuela ambassador, Bernardo Alvarez Herrera, in Washington about some of the problems, including the 23 employees who have been terminated for taking family leave or breaking minor work rules, as well as the company's refusal to bargain over labor/management issues.

"We told them we didn't need another bad corporate neighbor and that what Lyondell does as its Houston refinery directly affects how the citizens of Houston perceive Citgo," Lefton said.

Chronicle reporters L. M. Sixel and Nelson Antosh contributed to this story.