Chavez-controlled Citgo Gets Another Pass from Networks
The same broadcasters who went after oil company profits fail to seize on move by Citgo to avoid SEC oversight.

By Ken Shepherd
Business & Media Institute
March 9, 2006

     On March 2 a major oil company operating within the United States announced it would take steps to avoid reporting to the U.S. government. But in the week since, none of the three broadcast networks has taken notice, even though a Business & Media Institute study found the same media outlets have consistently attacked American oil companies as deserving additional government scrutiny for their “windfall profits.” Broadcast media outlets also ignored ExxonMobil’s plans to pump more money into improving and increasing oil production.

     “As a state company we cannot be subject to the legal obligations of foreign countries used to protect bondholders,” Venezuelan Oil Minister Rafael Ramirez said on March 2, announcing Citgo Petroleum Corporation’s plan to buy back bonds from American investors to avoid oversight by the Securities and Exchange Commission (SEC). According to the Associated Press report, SEC filings “disclose to investors key details about how the company operates, such as income from exports, refining, production and reserves.”

     The Hugo Chavez-led government of Venezuela owns Citgo, the American subsidiary of the state-run oil company, Petroleos de Venezuela SA (PDVSA).

     A Business & Media Institute (BMI) review of network transcripts found no stories on ABC, CBS, or NBC about the announcement in the days since, continuing a trend the Business & Media Institute documented in a March 1 study, “Hugo the Boss: Media criticize ‘greed’ of energy executives but go easy on Venezuela’s oil strongman.’”

     In the study, BMI found a virtual media blackout on Chavez’s belligerence – including threatening to cut off oil shipments to the United States and cutting back inbound airline flights from the United States – while the media focused intense scrutiny on the business practices of private, U.S.-based oil companies.

     “Big profits for Big Oil were big news in the past year. Network reporters couldn’t muster enough hyperbole to describe the success of the other major energy companies,” wrote BMI Director Dan Gainor. Gainor noted that while ExxonMobil was held to scrutiny for “record” profits, it “was vastly outperformed by Communist China’s state-owned PetroChina, which yielded nearly a 23 percent profit in 2004,” another petroleum company found undeserving of scrutiny by the broadcast media.

     While the media frequently feared that U.S. oil companies would not reinvest profits into producing more oil, they failed to report precisely that move by the nation’s largest oil company. The CBS, ABC, and NBC evening newscasts left out of their March 8 editions any mention of ExxonMobil’s (NYSE: XOM) plans to increase capital spending to improve oil production operations. The new company budget calls for “somewhere between $18 billion and $20 billion, up from $17.7 billion last year,” reported Reuters on the morning of March 8, adding that “the boost in spending comes as lawmakers and consumer advocates accuse large oil companies of not investing enough to boost oil and gas production.”