Chavez Needs Cash, Looks To Sell Citgo

Venezuelan President Hugo Chavez needs cash to pay for all his campaign promises as he seeks re-election in 2012.

Chavez has promised to build new public housing complexes, boost social programs, and renovate the Caracas subway. To pay for such programs, he has brought up selling off Venezuela's U.S.-based oil company, Citgo Petroleum Corp.

Selling the company and its refineries would give Chavez billions of dollars for domestic spending. Chavez says Citgo is worth $10 billion, but many analysts believe a sale would fetch less than half that.

The move is both political and business in nature. Chavez believes Citgo is poorly run and is more than ready to sell the company. Critics, however, warn that selling the company could endanger Venezuela's long-term business interests since oil is the lifeblood of the economy.

Chavez has increasingly sold oil outside of the U.S. under less profitable deals to cement political relationships. If Chavez were to authorize a sale, Venezuela would likely seek to negotiate a supply contract with the U.S.

Oil shipments to the U.S. have declined from 49 million barrels in February 1999, when Chavez took office, to 31.9 million barrels during the same month last year.