7-Eleven Kicks Chavez to the Curb

[01Snake]

7-Eleven to End Relationship with Venezuela-Backed Citgo

Wednesday, September 27, 2006

DALLAS — Convenience store operator 7-Eleven Inc. is dropping Venezuela-backed Citgo as its gasoline supplier at more than 2,100 locations and switching to its own brand of fuel.

The retailer said Wednesday it will purchase fuel from several distributors, including Tower Energy Group of Torrance, Calif., Sinclair Oil of Salt Lake City, and Houston-based Frontier Oil Corp.

A spokeswoman for Dallas-based 7-Eleven said its 20-year contract with Citgo Petroleum Corp. ends next week. About 2,100 of 7-Eleven's 5,300 U.S. stores sell gasoline.

Citgo is a Houston-based subsidiary of Venezuela's state-owned oil company, and the foreign parent became a public-relations issue for 7-Eleven because of comments by Venezuelan President Hugo Chavez.

Chavez has called President George W. Bush the devil and an alcoholic. The U.S. government has warned that Chavez is a destabilizing force in Latin America.

7-Eleven spokesman Margaret Chabris said that, "Regardless of politics, we sympathize with many Americans' concern over derogatory comments about our country and its leadership recently made by Venezuela's president Hugo Chavez."

Chabris said a boycott of Citgo gasoline would hurt the 4,000 employees of the U.S. subsidiary, who have no connection to Venezuela.

7-Eleven had been considering creating its own brand of fuel since at least early last year. Company officials said at the time they had spoken with independent fuel distributors.

[Yonivore]

7-Eleven to End Relationship with Venezuela-Backed Citgo

Wednesday, September 27, 2006

DALLAS — Convenience store operator 7-Eleven Inc. is dropping Venezuela-backed Citgo as its gasoline supplier at more than 2,100 locations and switching to its own brand of fuel.

The retailer said Wednesday it will purchase fuel from several distributors, including Tower Energy Group of Torrance, Calif., Sinclair Oil of Salt Lake City, and Houston-based Frontier Oil Corp.

A spokeswoman for Dallas-based 7-Eleven said its 20-year contract with Citgo Petroleum Corp. ends next week. About 2,100 of 7-Eleven's 5,300 U.S. stores sell gasoline.

Citgo is a Houston-based subsidiary of Venezuela's state-owned oil company, and the foreign parent became a public-relations issue for 7-Eleven because of comments by Venezuelan President Hugo Chavez.

Chavez has called President George W. Bush the devil and an alcoholic. The U.S. government has warned that Chavez is a destabilizing force in Latin America.

7-Eleven spokesman Margaret Chabris said that, "Regardless of politics, we sympathize with many Americans' concern over derogatory comments about our country and its leadership recently made by Venezuela's president Hugo Chavez."

Chabris said a boycott of Citgo gasoline would hurt the 4,000 employees of the U.S. subsidiary, who have no connection to Venezuela.

7-Eleven had been considering creating its own brand of fuel since at least early last year. Company officials said at the time they had spoken with independent fuel distributors.

Good for them! Slurpees all around.

Too bad the reporter didn't seek a comment from Venezuelan President Hugo Chavez, eh?

[01Snake]

[boutons_]

This is stupid.

The US needs any oil more than Chavez needs the US to buy VZ oil.

Chavez is already trying to reduce/eliminate his oil sales to USA.

So 7-11 is simply going along with Chavez's objectives.
ing brilliant.
Causes NO PAIN to Chavez at all.

[Crookshanks]

This is stupid.

The US needs any oil more than Chavez needs the US to buy VZ oil.

Chavez is already trying to reduce/eliminate his oil sales to USA.

So 7-11 is simply going along with Chavez's objectives.
ing brilliant.
Causes NO PAIN to Chavez at all.

Maybe it doesn't cause him any financial pain; however, it does send a message that you can't come to this country and trash our president without suffering the consequences. It's just possible that Chavez got a real kick out of us buying his gasoline - it gave him moral superiority.

We showed him we don't need him or his stinking oil!

[boutons_]

Crook

there are NO consequences to the 7-11 charade for VZ.

China and the rest of the world will readily buy up any oil CitGo can't sell in the USA.

7-11 may cause a lot of lost jobs at CitGo, shooting the USA in the foot.

[johnsmith]

This is stupid.

The US needs any oil more than Chavez needs the US to buy VZ oil.

Chavez is already trying to reduce/eliminate his oil sales to USA.

So 7-11 is simply going along with Chavez's objectives.
ing brilliant.
Causes NO PAIN to Chavez at all.

Seriously, I'll pay for you to move out of the country.

[ChumpDumper]

Maybe it doesn't cause him any financial pain; however, it does send a message that you can't come to this country and trash our president without suffering the consequences. It's just possible that Chavez got a real kick out of us buying his gasoline - it gave him moral superiority.

We showed him we don't need him or his stinking oil!

Psst. We're still buying his gasoline.

And if we don't, China will.

With our money.

We sure showed him.

[Crookshanks]

I guess you guys can't read. I said there wasn't any financial pain for Chavez - I said it was the message we sent. If you come here and trash our president, then we won't do business with you. Lets him know that not everyone agrees with his views.

[RandomGuy]

Fungibility is a measure of how easily one good may be exchanged or subs uted for another example of the same good at equal value.

http://en.wikipedia.org/wiki/Fungibility (full article worth reading to understand topic)

If we don't buy VZ oil, somebody will. This commodity market does not allow for people to pick and choose.

The best analogy I ever heard was ironically from a Dilbert cartoon I think:

It is as if all the oil in the world gets poured into a bathtub and buyers simply drain out what they want to buy.

There is no real seperating any one source from any other.

That said:

If you want to stick it to Chavez, get rid of the demand for oil.

[ChumpDumper]

He's not playing to the Slurpee and beef jerky crowd. If it's a message, he's not even opening the envelope.

[Phenomanul]

Maybe it doesn't cause him any financial pain; however, it does send a message that you can't come to this country and trash our president without suffering the consequences. It's just possible that Chavez got a real kick out of us buying his gasoline - it gave him moral superiority.

We showed him we don't need him or his stinking oil!

I have an 'in' on this story.... and the decision to not extend CITGO's contract was made about 5 months ago.... well before Chavez's UN speech.

[Mr. Peabody]

I have an 'in' on this story.... and the decision to not extend CITGO's contract was made about 5 months ago.... well before Chavez's UN speech.

You're telling me that 7-Eleven didn't overhaul its operational structure as a knee-jerk reaction in defense of our President's good name and honor. That's surprising.

[Spurminator]

Wow, what a total non-story.

Score another one for Drudge.

[Guru of Nothing]

And in other news, I bought gas today - and I don't know where it came from.

[scott]

This is nothing more than 7-11 striking deals with other companies on more favorable terms. This isn't a jab at VZ (since Citgo refineries that would supply 7-11s are... you guessed it, in the US) and it doesn't put any more or any less VZ crude oil onto the market.

[Notorious H.O.P.]

I guess you guys can't read. I said there wasn't any financial pain for Chavez - I said it was the message we sent. If you come here and trash our president, then we won't do business with you. Lets him know that not everyone agrees with his views.

I'm sure he's in his office right now thinking "I better shut my mouth before other people decide to follow 7-11s lead".

Or "Maybe I shouldn't have called him the devil."

Or "Damn the US by not buying our oil!"

There is no message sent here. No financial pain, no loss of moral superiority. If I were him, I'd actually laugh about this.

But if it is true that 7-11s decision was made before the UN speech than it is a great PR ploy by 7-11 to pimp the announcement that they are not renewing the contract based on Chavez derogatory comments. It gives them the appearance of standing on higher moral and ethical ground, and by further exposing the Chavez-VZ-Citgo connection to a wider consumer base, it attempts to pull business from Citgo selling compe ors to it's own independent and US produced fuel brand.

Slurpees all around indeed.

[ChumpDumper]

I was mildly surprised Southland went out of their way to say Chavez' comments had nothing to do with their decision although they said they understand the furor over his words and certainly don't approve or agree with them.

[Yonivore]

This is nothing more than 7-11 striking deals with other companies on more favorable terms. This isn't a jab at VZ (since Citgo refineries that would supply 7-11s are... you guessed it, in the US) and it doesn't put any more or any less VZ crude oil onto the market.

So, losing a major Citgo customer doesn't affect their bottom line at all?

And, I won't argue that 7-11 was making any moral distinction. After more reading, I agree the timing is just coincidental.

But, seriously. If Citgo is a wholly owned subsidiary of Venezuela, wouldn't losing a major customer, such as Southland Corporation (if that's who still owns 7-11), have some impact?

[NASCARdad]

Don't do no good since Habib will still be behind the counter.

[Phenomanul]

So, losing a major Citgo customer doesn't affect their bottom line at all?

And, I won't argue that 7-11 was making any moral distinction. After more reading, I agree the timing is just coincidental.

But, seriously. If Ci_tgo is a wholly owned subsidiary of Venezuela, wouldn't losing a major customer, such as Southland Corporation (if that's who still owns 7-11), have some impact?

C_IT_GO sells more gasoline than they actually produce.... they end up having to buy gasoline from other refiners, and have to add their own additives before they can sell it. This is highly unprofitable from a refining standpoint but good from a PR standpoint.

Not extending the contract then was a way of cutting back the marketing costs associated with that practice.

The other option was to expand the refining capacity. But that was not in P_D_V_SA's vision for the company.

Either way, the same amount of Venezuelan crude is still being processed by C_IT_GO refineries in the U.S. - that number hasn't changed.

[Yonivore]

C_IT_GO sells more gasoline than they actually produce.... they end up having to buy gasoline from other refiners, and have to add their own additives before they can sell it. This is highly unprofitable from a refining standpoint but good from a PR standpoint.

Not extending the contract then was a way of cutting back the marketing costs associated with that practice.

The other option was to expand the refining capacity. But that was not in P_D_V_SA's vision for the company.

Either way, the same amount of Venezuelan crude is still being processed by C_IT_GO refineries in the U.S. - that number hasn't changed.

Not that I'm going to spend a whole of a lot of time trying to noodle through this but you cannot tell me that Venezuelan owned CITGO did not benefit from Southland Corporation's exclusive use of the CITGO brand.

[ChumpDumper]

What was that benefit?

[Yonivore]

What was that benefit?

if I know but, I seem to recall people in this board making a big deal, some time back, about how CITGO and Hugo were tied at the waist and we were dupes for not recognizing how much we were benefitting him everytime we pulled up to a 7-11 pump.

Sorry, that's not an exact quote from the forum and, no, I don't remember who made the argument.

I'm just trying to understand how CITGO wouldn't benefit from having their brand on every 7-11 pump in the country.

[Crookshanks]

What was that benefit?

Chump - you make my head hurt! Trying to reason with you is like trying to reason with a two-year old!