7-Eleven to End Relationship with Venezuela-Backed Citgo

DALLAS – A week after Venezuelan President Hugo Chavez called George W. Bush "the devil," convenience store chain 7-Eleven Inc. said Wednesday it will stop selling gasoline from Venezuelan-controlled Citgo Petroleum Corp.

The Dallas, Texas-based company said in a statement it disapproved of Chavez' comments, but a spokeswoman insisted politics were not part of the decision to end its 20-year agreement with Houston-based Citgo, a position supported by Venezuelan and Citgo officials.

Chavez angered the White House and its supporters when he called President Bush "the devil" in a Sept. 20 speech at the United Nations and said the podium still reeked of sulfur after a Bush appearance there.

"Regardless of politics, we sympathize with many Americans' concerns over derogatory comments about our country and its leadership recently made" by Chavez, 7-Eleven said in a statement.

The company's decision appeared to represent a broadening of U.S.-Venezuela tensions, which previously had been little more than a war of words between Chavez and the Bush administration, but 7-Eleven spokeswoman Margaret Chabris told Reuters that was not the case.

The decision to drop Citgo, a subsidiary of Venezuelan national oil company PDVSA, was made well before the speech, she said, and based on 7-Eleven's desire to sell its own branded gasoline.

"People are making it out to be more than it is," Chabris said.

A source close to the talks said Citgo, which supplies 2,100 7-Eleven locations, was told two months ago of the company's decision. Citgo, which is narrowing its U.S. operations, had offered to renew the contract by supplying 7-Eleven stores in Texas and Florida, but not in other states it had previously served, the source said.

Venezuelan Energy and Petroleum Minister Rafael Ramirez, who also serves as PDVSA's president, confirmed that the move was just a business decision.

"No, no, no, no. We made our decisions with respect to some gas stations a long time ago," Ramirez told reporters in Caracas in response to a question about conflict between Citgo and 7-Eleven. "There is no conflict there."

Citgo earlier this year said it was cutting the number of gas stations it supplies for business reasons, company officials said.

SIGNS COMING DOWN

7-Eleven said it would begin taking down Citgo signs and sell under under its own brand gasoline provided by several U.S. refiners. Its agreement with Citgo expires Sept. 30.

7-Eleven is the world's largest convenience store operator, with chains in 20 countries. It is owned by Japan's Seven & I Holdings Co. Ltd.

The leftist Chavez routinely blasts President Bush in speeches at home, but his New York address received lots of coverage in the United States and rankled many Americans.

Despite the backlash, Chavez maintained his anti-Bush harangue Wednesday, repeating his sulfur comment in Caracas at an event to sign business deals between Venezuela and Russia.

Chavez said he was fighting to stop the superpower treating Venezuela like a colony.

"Never again will we be put in chains, even though some want to send our country back to the dark cave of slavery," he said.

Despite his animosity toward Bush, he has not stopped the flow of oil to the United States, which is Venezuela's biggest crude customer, and has even given away or sold at discounts heating oil to impoverished Americans.

His war of words with the Bush administration has provoked one organization, the conservative American Family Association, to call for a boycott of Venezuelan oil.

But 7-Eleven warned against a boycott, noting that Citgo supplies 14,000 retailers with gasoline and employs 4,000 people in the U.S.

"Americans with no substantive connection to Venezuela would be economically harmed by boycotts," 7-Eleven said.

Oil analyst Tim Evas at Citigroup said it was unlikely political disagreements with Venezuela, which is the world's fifth-leading oil exporter, would cause Citgo to lose U.S. customers.

"At the end of the day, I think business is just business," he said.