• by Emily Burg , October 11, 2006

Venezuelan state-owned Citgo Petroleum will launch a new ad campaign this month to "set the record straight" about its political affiliations and commitment to doing business in the U.S.

The effort is designed to counteract a wave of negative publicity in the wake of Venezuelan President Hugo Chavez's anti-American remarks at the U.N. last month.

The campaign, from Barkley of Kansas City, builds on the "Fueling more than your car," theme launched in June, to promote the launch of the Citgo-branded Citi Platinum Select MasterCard. It will highlight Citgo's history as a more than 100-year-old incorporated entity in the U.S., and focus on its "American community" of more than 100,000 workers.

Citgo declined to comment on spending, but said it will distribute PR materials and talking points for independent owners of the 13,000 domestic Citgo gas stations to use when talking to the media.

"This is about business vs. politics," says Citgo spokesman David McCollum. "We want to stress our commitments to the U.S. marketplace and to the American consumer, not distance ourselves from Venezuela."

The company had issued a statement last week seeking to correct misinformation about its relationship to its parent company. At that point, Citgo said that rivals ChevronTexaco, ConocoPhillips and Valero also are buyers of, or investors in, Venezuela and its massive crude oil supply. It also recapped its charitable commitment to American communities, including disaster relief after Hurricanes Rita and Katrina.

The week after Chavez's controversial remarks, national convenience-store operator 7-Eleven Inc. said it would stop distributing Citgo gas at more than 2,100 locations in advance of the expiration of the companies' 20-year contract.

While the decision not to renew their contract was made months prior, it was perceived as a direct response to the Chavez imbroglio. The news of Citgo's Venezuelan connection prompted calls for a boycott of Citgo gas.

Citgo said the 7-Eleven contracts did not fit with Citgo's strategy to balance sales with refinery production after the sale of its interest in a Houston area refinery. "7-Eleven has been a valued customer for many years and we wish them the best," said Alan Flagg, general manager of light oils marketing in a statement.

Citgo Petroleum Corp., headquartered in Houston, is owned by PDV America, Inc.--an indirect, wholly owned subsidiary of Petróleos de Venezuela, S.A., the national oil company of the Bolivarian Republic of Venezuela.