================================================================================

                                  United States

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    Form 10-K

(Mark One)
 [ x ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                                  ACT OF 1934

                   For the Fiscal Year Ended December 31, 1999

                                       OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                                  ACT OF 1934

            For the transition period from ___________ to ___________

                        Commission file number 001-12138

                                PDV America, Inc.
             (Exact name of registrant as specified in its charter)

           Delaware                                         51-0297556
(State or other jurisdiction of                  (I.R.S. Employer Identification
incorporation or organization)                                 No.)

                 750 Lexington Avenue, New York, New York 10022
               (Address of principal executive office) (Zip Code)

                                 (212) 753-5340
              (Registrant's telephone number, including area code)

           Securities registered pursuant to Section 12(b) of the Act:

     Title of Each Class               Name of each Exchange on which registered
     -------------------               -----------------------------------------
7-3/4% Senior Notes, Due 2000                New York Stock Exchange, Inc.
7-7/8% Senior Notes, Due 2003                New York Stock Exchange, Inc.


        Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes_x_ No___

     Disclosure of delinquent filers pursuant to Item 405 of Regulation S-K:
                                 Not Applicable
    Aggregate market value of the voting stock held by non-affiliates of the
                           registrant: Not Applicable

      Number of shares of Common Stock, $1.00 par value, outstanding as of
                              March 1, 2000: 1,000

                    DOCUMENTS INCORPORATED BY REFERENCE: None

================================================================================


<PAGE>


PDV AMERICA, INC.

Annual Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the Fiscal Year Ended December 31, 1999

<TABLE>
<CAPTION>
TABLE OF CONTENTS
-------------------------------------------------------------------------------------------------------------------

                                                                                                               Page
<S>                                                                                                             <C>
FACTORS AFFECTING FORWARD LOOKING STATEMENTS.....................................................................ii


PART I

ITEMS 1. and 2.     Business and Properties.......................................................................1
ITEM 3.             Legal Proceedings............................................................................17
ITEM 4.             Submission of Matters to a Vote of Security Holders..........................................18

PART II

ITEM 5.             Market for Registrant's Common Equity and Related Stockholder Matters........................19
ITEM 6.             Selected Financial Data......................................................................19
ITEM 7.             Management's Discussion and Analysis of Financial Condition and Results of Operations........20
ITEM 7 A.           Quantitative and Qualitative Disclosures About Market Risk...................................27
ITEM 8.             Financial Statements and Supplementary Data..................................................30
ITEM 9.             Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.........30

PART III

ITEM 10.            Directors And Executive Officers Of The Registrant...........................................31
ITEM 11.            Executive Compensation.......................................................................31
ITEM 12.            Security Ownership of Certain Beneficial Owners and Management...............................31
ITEM 13.            Certain Relationships and Related Transactions...............................................31

PART IV

ITEM 14.            Exhibits, Financial Statements and Reports on Form 8-K.......................................35
</TABLE>





                                       i

<PAGE>



                  FACTORS AFFECTING FORWARD LOOKING STATEMENTS

         This Annual Report on Form 10-K contains certain "forward looking
statements" within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended.
Specifically, all statements under the captions "Items 1 and 2 - Business and
Properties" and "Item 7 - Management's Discussion and Analysis of Financial
Condition and Results of Operations" relating to Year 2000 matters, capital
expenditures and investments related to environmental compliance and strategic
planning, purchasing patterns of refined products and capital resources
available to the Companies (as defined herein) are forward looking statements.
In addition, when used in this document, the words "anticipate", "estimate",
"prospect" and similar expressions are used to identify forward-looking
statements. Such statements are subject to certain risks and uncertainties, such
as increased inflation, continued access to capital markets and commercial bank
financing on favorable terms, increases in regulatory burdens, changes in prices
or demand for the Companies' products as a result of competitive actions or
economic factors and changes in the cost of crude oil, feedstocks, blending
components or refined products. Such statements are also subject to the risks of
increased costs in related technologies and such technologies producing
anticipated results. Should one or more of these risks or uncertainties, among
others, materialize, actual results may vary materially from those estimated,
anticipated or projected. Although PDV America, Inc. believes that the
expectations reflected by such forward looking statements are reasonable based
on information currently available to the Companies, no assurances can be given
that such expectations will prove to have been correct.








                                       ii

<PAGE>


                                     PART I

ITEMS 1. and 2. Business and Properties


Overview

         PDV America, Inc. ("PDV America" or the "Company" and, together with
its subsidiaries, the "Companies") was incorporated in 1986 in the State of
Delaware and is a wholly owned subsidiary, effective April 2, 1997, of PDV
Holding, Inc. ("PDV Holding"), a Delaware corporation. The Company's ultimate
parent is Petroleos de Venezuela, S.A. (together with one or more of its
subsidiaries, referred to herein as "PDVSA"), the national oil company of the
Bolivarian Republic of Venezuela. Through its wholly owned operating
subsidiaries, CITGO Petroleum Corporation ("CITGO") and PDV Midwest Refining
L.L.C. ("PDVMR") (see below), PDV America refines, markets and transports
petroleum products, including gasoline, diesel fuel, jet fuel, petrochemicals,
lubricants, asphalt and refined waxes, mainly within the continental United
States east of the Rocky Mountains.

         Prior to May 1, 1997, the Company had a 50% interest in The UNO-VEN
Company ("UNO-VEN"), an Illinois general partnership. As of May 1, 1997,
pursuant to a Partnership Interest Retirement Agreement, certain UNO-VEN assets
were transferred to PDMVR. Accordingly, the Company's consolidated financial
statements reflect the equity in earnings of UNO-VEN through April 30, 1997
(Consolidated Financial Statemens of PDV America - Note 8 of Item 14a), the
results of operations of PDVMR on a consolidated basis since May 1, 1997 and the
financial position of PDVMR at December 31, 1998 and 1999. See "--PDV Midwest
Refining, L.L.C."











                                       1

<PAGE>


         PDV America's aggregate net interest in rated crude oil refining
capacity is 858 thousand barrels per day ("MBPD"). The following table shows the
capacity of each U.S. refinery in which PDV America holds an interest and PDV
America's share of such capacity as of December 31, 1999.

                          PDV America Refining Capacity

<TABLE>
<CAPTION>
                                                                                               Net PDV
                                                                              Total Rated      America
                                                                                 Crude      Ownership In
                                                               PDV America     Refining       Refining
Location                                     Owner              Interest       Capacity       Capacity
                                   -------------------------- -------------- -------------- --------------
                                                                    %            MBPD           MBPD
<S>                                     <C>                        <C>            <C>            <C>
Lake Charles, LA                             CITGO                 100            320            320
Corpus Christi, TX                           CITGO                 100            150            150
Paulsboro, NJ                                CITGO                 100             84             84
Savannah, GA                                 CITGO                 100             28             28
Houston, TX (1)                         LYONDELL-CITGO              41            265            109
Lemont, IL                                   PDVMR                 100            167            167
                                                                             -------------- --------------
     Total Rated Refining
     Capacity as of December 31,
     1999                                                                       1,014            858
                                                                             ============== ==============
--------------------
<FN>
(1)  Initial interest acquired on July 1, 1993. CITGO has a one-time option,
     exercisable after January 1, 2000 but not later than September 30, 2000, to
     increase for an additional investment, its participation interest up to a
     maximum of 50%. See "CITGO-Refining-LYONDELL-CITGO". See also "Factors
     Affecting Forward Looking Statements".
</FN>
</TABLE>

         The following table shows sales revenues and volumes of PDV America for
the three years in the period ended December 31, 1999.

                     PDV America Sales Revenues and Volumes

<TABLE>
<CAPTION>
                                          Year Ended December 31,                    Year Ended December 31,
                                      1999          1998           1997         1999          1998          1997
                                  ------------- ------------- ------------- ------------- ------------- --------------

                                              ($ in millions)                             (MM gallons)
<S>                                   <C>         <C>           <C>             <C>           <C>           <C>
Gasoline                              $7,691      $  6,252      $  7,754        13,115        13,241        11,953
Jet fuel                               1,129           828         1,183         2,198         1,919         2,000
Diesel/#2 fuel                         2,501         1,945         2,439         5,057         4,795         4,288
Asphalt                                  338           300           398           753           774           749
Petrochemicals and industrial
    products                           1,041           952         1,178         2,306         2,658         1,961
Lubricants and waxes                     482           441           467           285           230           239
                                  ------------- ------------- ------------- ------------- ------------- --------------
        Total refined product
          sales                      $13,182       $10,718       $13,419        23,714        23,617        21,190
Other sales                              150           242           203             -             -             -
                                  ------------- ------------- ------------- ------------- ------------- --------------
             Total sales             $13,332       $10,960       $13,622        23,714        23,617        21,190
                                  ============= ============= ============= ============= ============= ==============
</TABLE>



                                        2

<PAGE>


         The following table shows PDV America's aggregate interest in refining
capacity, refinery input and product yield for the three years in the period
ended December 31, 1999.

                       PDV America Refinery Production (1)

<TABLE>
<CAPTION>
                                                                     Year Ended December 31,
                                              ----------------------------------------------------------------------
                                                     1999(2)                 1998(2)              1997(3) (4)
                                              ----------------------- ----------------------------------------------
                                                              (MBPD, except as otherwise indicated)

<S>                                                <C>         <C>         <C>       <C>          <C>        <C>
Rated Refining Capacity at year end                858                     858                    853
Refinery Input
     Crude oil                                     753         84%         763       83%          675        81%
     Other feedstocks                              146         16%         159       17%          159        19%
                                              ----------- ----------- ----------- ----------- ---------- -----------
         Total                                     899        100%         922      100%          834       100%
                                              =========== =========== =========== =========== ========== ===========

Product Yield
     Light fuels
         Gasoline                                  401         44%         413       44%          381        45%
         Jet fuel                                   72          8%          69        7%           68         8%
         Diesel/#2 fuel                            173         19%         175       19%          144        17%
     Asphalt                                        42          5%          45        5%           42         5%
     Petrochemicals and industrial products        219         24%         231       25%          206        25%
                                              ----------- ----------- ----------- ----------- ---------- -----------
         Total                                     907        100%         933      100%          841       100%
                                              =========== =========== =========== =========== ========== ===========
Utilization of Rated Refining Capacity                         88%                   89%                     79%
--------------------
<FN>
(1)  Includes all of CITGO refinery production, except as otherwise noted.
(2)  Includes a weighted average of 41.25% of the Houston refinery for 1999 and 1998.
(3)  Includes a weighted average of 34.44% of the Houston refinery for 1997.
(4)  For 1997, includes all of CITGO refinery production, 50% of UNO-VEN
     refinery production through April 30, 1997 and all of PDVMR refinery
     production beginning May 1, 1997 through December 31, 1997.
</FN>
</TABLE>

Competitive Nature of the Petroleum Refining Business

         The petroleum refining industry is cyclical and highly volatile,
reflecting capital intensity with high fixed and low variable costs. Petroleum
industry operations and profitability are influenced by a large number of
factors, over some of which individual petroleum refining and marketing
companies have little control. Governmental regulations and policies,
particularly in the areas of taxation, energy and the environment, have a
significant impact on petroleum activities, regulating how companies conduct
their operations and formulate their products. The U.S. petroleum refining
industry has entered a period of consolidation in which a number of former
competitors have combined their operations. Demand for crude oil and its
products is largely driven by the health of local and worldwide economies,
although weather patterns and taxation relative to other energy sources also
play significant parts. Generally, U.S. refiners compete for sales on the basis
of price and brand image and, in some areas, product quality.

                                       3

<PAGE>


CITGO

         CITGO refines, markets and transports gasoline, diesel fuel, jet fuel,
petrochemicals, lubricants, refined waxes, asphalt and other refined products
throughout the United States, primarily east of the Rocky Mountains. CITGO's
transportation fuel customers include primarily CITGO branded wholesale
marketers, convenience stores and airlines located mainly east of the Rocky
Mountains. Asphalt is principally marketed to independent paving contractors on
the East Coast of the United States. Lubricants are sold, principally in the
United States, to independent marketers, mass marketers and industrial
customers. Petrochemical, feedstocks and industrial products are sold to various
manufacturers and industrial companies throughout the United States. Petroleum
coke is sold primarily in international markets.

Refining

         CITGO's aggregate net interest in rated crude oil refining capacity is
691 thousand barrels per day ("MBPD"). The following table shows the capacity of
each U.S. refinery in which CITGO holds an interest and CITGO's share of such
capacity as of December 31, 1999.

<TABLE>
<CAPTION>
                                                                              Total Rated     Net CITGO
                                                                                 Crude      Ownership In
                                                                  CITGO        Refining       Refining
Location                                     Owner              Interest       Capacity       Capacity
                                   -------------------------- -------------- -------------- --------------
                                                                   (%)          (MBPD)         (MBPD)
<S>                                    <C>                         <C>            <C>            <C>
Lake Charles, LA                             CITGO                 100            320            320
Corpus Christi, TX                           CITGO                 100            150            150
Paulsboro, NJ                                CITGO                 100             84             84
Savannah, GA                                 CITGO                 100             28             28
Houston, TX (1)                         LYONDELL-CITGO              41            265            109
                                                                             -------------- --------------

     Total Rated Refining
     Capacity as of December 31,
     1999                                                                         847            691
                                                                             ============== ==============
--------------------
<FN>
(1)  Initial interest acquired on July 1, 1993. CITGO has a one-time option,
     exercisable after January 1, 2000 but not later than September 30, 2000, to
     increase for an additional investment, its participation interest up to a
     maximum of 50%. See "CITGO--Refining--LYONDELL-CITGO". See also "Factors
     Affecting Forward Looking Statements".
</FN>
</TABLE>




                                       4

<PAGE>


     The following table shows CITGO's aggregate interest in refining capacity,
refinery input and product yield for the three years in the period ended
December 31, 1999.

                          CITGO Refinery Production (1)

<TABLE>
<CAPTION>
                                                                     Year Ended December 31,
                                              ----------------------------------------------------------------------
                                                     1999(2)                 1998(2)                1997(3)
                                              ----------------------- ----------------------------------------------
                                                              (MBPD, except as otherwise indicated)

<S>                                                <C>        <C>          <C>      <C>           <C>       <C>
Rated Refining Capacity at year end                691                     691                    693
Refinery Input
     Crude oil                                     607         82%         615       81%          548        79%
     Other feedstocks                              129         18%         144       19%          143        21%
                                              ----------- ----------- ----------- ----------- ---------- -----------
         Total                                     736        100%         759      100%          691       100%
                                              =========== =========== =========== =========== ========== ===========

Product Yield
     Light fuels
         Gasoline                                  317         43%         334       43%          309        44%
         Jet fuel                                   70          9%          66        9%           66         9%
         Diesel/#2 fuel                            136         18%         134       17%          112        16%
     Asphalt                                        42          6%          45        6%           42         6%
     Petrochemicals and industrial products        179         24%         193       25%          174        25%
                                              ----------- ----------- ----------- ----------- ---------- -----------
         Total                                     744        100%         772      100%          703       100%
                                              =========== =========== =========== =========== ========== ===========
Utilization of Rated Refining Capacity                         88%                   89%                     79%
--------------------
<FN>
(1)  Includes all of CITGO refinery production, except as otherwise noted.
(2)  Includes a weighted average of 41.25% of the Houston refinery for 1999 and 1998.
(3)  Includes a weighted average of 34.44% of the Houston refinery for 1997.
</FN>
</TABLE>

         CITGO produces its light fuels and petrochemicals primarily through its
Lake Charles and Corpus Christi refineries. Asphalt refining operations are
carried out through CITGO's Paulsboro and Savannah refineries. CITGO also owns
an interest in and obtains refined products from a refinery in Houston.

         Lake Charles, Louisiana Refinery. This refinery has a rated refining
capacity of 320 MBPD and is capable of processing large volumes of heavy crude
oil into a flexible slate of refined products, including significant quantities
of high-octane unleaded gasoline and reformulated gasoline. The Lake Charles
refinery has a Solomon Process Complexity Rating of 17.6 (as compared to an
average of 13.6 for U.S. refineries in the most recently available Solomon
Associates, Inc. survey). The Solomon Process Complexity Rating is an industry
measure of a refinery's ability to produce higher value products. A higher
Solomon Process Complexity Rating indicates a greater capability to produce such
products.




                                       5

<PAGE>


         The following table shows the rated refining capacity, refinery input
and product yield at the Lake Charles refinery for the three years in the period
ended December 31, 1999.

                        Lake Charles Refinery Production

<TABLE>
<CAPTION>
                                                                     Year Ended December 31,
                                              ----------------------------------------------------------------------
                                                       1999                    1998                   1997
                                              ----------------------- ----------------------------------------------
                                                              (MBPD, except as otherwise indicated)

<S>                                                <C>        <C>          <C>      <C>           <C>       <C>
Rated Refining Capacity at year end                320                     320                    320
Refinery Input
     Crude oil                                     298         89%         288       84%          291        88%
     Other feedstocks                               36         11%          54       16%           40        12%
                                              ----------- ----------- ----------- ---------- ----------- -----------
         Total                                     334        100%         342      100%          331       100%
                                              =========== =========== =========== ========== =========== ===========

Product Yield
     Light fuels
         Gasoline                                  171         50%         187       54%          177        52%
         Jet fuel                                   63         18%          59       17%           60        18%
         Diesel/#2 fuel                             53         16%          47       13%           45        13%
     Petrochemicals and industrial products         54         16%          55       16%           56        17%
                                              ----------- ----------- ----------- ---------- ----------- -----------
         Total                                     341        100%         348      100%          338       100%
                                              =========== =========== =========== ========== =========== ===========
Utilization of Rated Refining Capacity                         93%                   90%                     91%
</TABLE>

         Approximately 33%, 66% and 63% of the total crude runs at the Lake
Charles refinery, in the years 1999, 1998 and 1997, respectively, consisted of
crude oil with an average API gravity of 24 degrees or less. Due to the complex
processing required to refine such crude oil, the Lake Charles refinery's
economic crude oil throughput capacity is approximately 290 MBPD, which is
approximately 91% of its rated capacity of 320 MBPD. The volume of heavy crude
oil available to CITGO in 1999 was less than in previous years. As a result, the
crude oil slate refined in 1999 was lighter. (See "Items 1. and 2. Business and
Properties--Crude Oil and Refined Product Purchases").

         The Lake Charles refinery's Gulf Coast location provides it with access
to crude oil deliveries from multiple sources; imported crude oil and feedstock
supplies are delivered by ship directly to the Lake Charles refinery, while
domestic crude oil supplies are delivered by pipeline and barge. In addition,
the refinery is connected by pipelines to the Louisiana Offshore Oil Port and to
terminal facilities in the Houston area through which it can receive crude oil
deliveries if the Lake Charles docks are temporarily inaccessible. For delivery
of refined products, the refinery is connected through the Lake Charles Pipeline
directly to the Colonial and Explorer Pipelines, which are the major refined
product pipelines supplying the northeast and midwest regions of the United
States, respectively. The refinery also uses adjacent terminals and docks, which
provide access for ocean tankers and barges to load refined products for
shipment.

         The Lake Charles refinery's main petrochemical products are propylene
and benzene. Industrial products include sulphur, residual fuels and petroleum
coke.

         Located adjacent to the Lake Charles refinery is a lubricants refinery
operated by CITGO and owned by Cit-Con Oil Corporation ("Cit-Con"), which is
owned 65% by CITGO and 35% by Conoco, Inc. ("Conoco"). Primarily because of its
specific design, the Cit-Con refinery produces high quality oils and waxes, and
is one of the few in the industry designed as a stand-alone lubricants refinery.
Feedstocks

                                       6

<PAGE>


are supplied 65% from CITGO's Lake Charles refinery and 35% from Conoco's Lake
Charles refinery. Finished refined products are shared on the same pro rata
basis by CITGO and Conoco.

         Corpus Christi, Texas Refinery. The Corpus Christi refinery is an
efficient and highly complex facility, capable of processing high volumes of
heavy crude oil into a flexible slate of refined products, with a Solomon
Process Complexity Rating of 16.7 (as compared to an average 13.6 for U.S.
refineries in the most recently available Solomon Associates, Inc. survey). This
refinery complex consists of the East and West Plants, located within five miles
of each other.

         The following table shows rated refining capacity, refinery input and
product yield at the Corpus Christi refinery for the three years in the period
ended December 31, 1999.

                       Corpus Christi Refinery Production

<TABLE>
<CAPTION>
                                                                     Year Ended December 31,
                                              ----------------------------------------------------------------------
                                                       1999                    1998                   1997
                                              ----------------------- ---------------------- -----------------------
                                                              (MBPD, except as otherwise indicated)

<S>                                                <C>        <C>          <C>      <C>           <C>        <C>
Rated Refining Capacity at year end                150                     150                    150
Refinery Input
     Crude oil                                     148         70%         152       71%          115        59%
     Other feedstocks                               62         30%          61       29%           79        41%
                                              ----------- ----------- ----------- ---------- ----------- -----------
         Total                                     210        100%         213      100%          194       100%
                                              =========== =========== =========== ========== =========== ===========

Product Yield
     Light fuels

         Gasoline                                   96         46%          97       46%           93        48%
         Diesel/#2 fuel                             55         27%          58       27%           45        23%
     Petrochemicals and industrial products         56         27%          57       27%           56        29%
                                              ----------- ----------- ----------- ---------- ----------- -----------
         Total                                     207        100%         212      100%          194       100%
                                              =========== =========== =========== ========== =========== ===========
Utilization of Rated Refining Capacity                         99%                  101%                     77%
</TABLE>

         Corpus Christi crude runs during 1999 and 1998 consisted of 81% and
100%, respectively, heavy sour Venezuelan crude. The average API gravity of the
composite crude slate run at the Corpus Christi refinery is approximately 24
degrees. Crude oil supplies are delivered directly to the Corpus Christi
refinery through the Port of Corpus Christi. The relatively low utilization of
rated refining capacity in 1997 is a result of a major turnaround in that year.

         CITGO operates the West Plant under a sublease agreement (the
"Sublease") from Union Pacific Corporation ("Union Pacific"). The basic term of
the Sublease ends on January 1, 2004, but CITGO may renew the Sublease for
successive renewal terms through January 31, 2011. CITGO has the right to
purchase the West Plant from Union Pacific at the end of the basic term, the end
of any renewal term, or on January 31, 2011 at a nominal price.

         The Corpus Christi refinery's main petrochemical products include
cumene, cyclohexane, methyl tertiary butyl ether ("MTBE") and aromatics
(including benzene, toluene and xylene). The Company produces a significant
quantity of cumene, an important petrochemical product used in the engineered
plastics industry.

         LYONDELL-CITGO Refining LP. Subsidiaries of CITGO and Lyondell Chemical
Company ("Lyondell") are partners in LYONDELL-CITGO Refining LP
("LYONDELL-CITGO"), which owns

                                       7

<PAGE>


and operates a sophisticated 265 MBPD refinery previously owned by Lyondell and
located on the ship channel in Houston, Texas. At December 31, 1999, CITGO's
investment in LYONDELL-CITGO was $560 million. In addition, at December 31,
1999, CITGO held notes receivable from LYONDELL-CITGO of $28 million. (See
Consolidated Financial Statements of PDV America -- Note 3 in Item 14a). A
substantial amount of the crude oil processed by this refinery is supplied by
PDVSA under a long-term crude oil supply agreement through the year 2017. CITGO
purchases substantially all of the gasoline, diesel and jet fuel produced at
this refinery under a long-term contract. (See Consolidated Financial Statements
of PDV America -- Notes 2 and 3 in Item 14a).

Crude Oil and Refined Product Purchases

         CITGO owns no crude oil reserves or production facilities and must
therefore rely on purchases of crude oil and feedstocks for its refinery
operations. In addition, because CITGO's refinery operations do not produce
sufficient refined products to meet the demands of its branded marketers, CITGO
purchases refined products, primarily gasoline, from other refiners, including
LYONDELL-CITGO, PDV Midwest Refining, L.L.C. ("PDVMR"), Chalmette Refining,
L.L.C. ("Chalmette") and Hovensa, L.L.C. ("HOVENSA"). (See "Item 13 -- Certain
Relationships and Related Transactions").








                                       8

<PAGE>


         Crude Oil Purchases. The following chart shows CITGO's purchases of
crude oil for the three years in the period ended December 31, 1999:

                            CITGO Crude Oil Purchases

<TABLE>
<CAPTION>
                   Lake Charles, LA         Corpus Christi, TX          Paulsboro, NJ             Savannah, GA
                ------------------------  ------------------------ ------------------------  ------------------------
                 1999    1998     1997     1999    1998    1997     1999     1998    1997     1999    1998    1997
                ------- -------- -------  ------- ------- -------- -------- ------- -------  ------- ----------------
                        (MBPD)                    (MBPD)                   (MBPD)                    (MBPD)

Suppliers
<S>                <C>     <C>      <C>      <C>     <C>     <C>       <C>      <C>     <C>      <C>     <C>     <C>
PDVSA              104     134      130      118     153     117       42       52      49       19      17      14
PEMEX               54      51       61       14       -       -        -        -       -        -       -       -
Occidental           -      20       40        -       -       -        -        -       -        -       -       -
Other sources      142      88       57       15       -       -        -        -       -        -       -       -
                ------- -------- -------  ------- ------- -------- -------- ------- -------  ------- ----------------
     Total         300     293      288      147     153     117       42       52      49       19      17      14
                ======= ======== =======  ======= ======= ======== ======== ======= =======  ======= ======== =======
</TABLE>

         CITGO's largest supplier of crude oil is PDVSA. CITGO has entered into
long-term crude oil supply agreements with PDVSA with respect to the crude oil
requirements for each of CITGO's refineries. The following table shows the base
and incremental volumes of crude oil contracted for delivery and the volumes of
crude oil actually delivered under these contracts in the three years ended
December 31, 1999.

                   CITGO Crude Oil Supply Contracts with PDVSA

<TABLE>
<CAPTION>
                                                                     Volumes of
                                                                 Crude Oil Purchased
                                      Contract Crude             For the Year Ended          Contract
                                        Oil Volume                  December 31,            Expiration
                                ---------------------------  ----------------------------
                                  Base    Incremental (1)      1999      1998     1997         Date
                                --------- -----------------  --------- --------- --------  -------------
                                          (MBPD)                       (MBPD)                 (year)
         Location

<S>                                 <C>           <C>          <C>         <C>       <C>        <C>
         Lake Charles, LA (2)       120           50           101(3)      121       115        2006
         Corpus Christi, TX (2)     130            -           108(3)      128       125        2012
         Paulsboro, NJ (2)           30            -            22(3)       35        35        2010
         Savannah, GA (2)            12            -            11(3)       12        12        2013
         Houston, TX (4)            200            -           173         223       216        2017
         --------------------
<FN>
         (1)  The supply agreement for the Lake Charles refinery gives PDVSA the
              right to sell to CITGO incremental volumes up to the maximum
              amount specified in the table, subject to certain restrictions
              relating to the type of crude oil to be supplied, refining
              capacity and other operational considerations at the refinery.

         (2)  Volumes purchased as shown on this table do not equal purchases
              from PDVSA (shown in the previous table) as a result of transfers
              between refineries of contract crude purchases included here and
              spot purchases which are included in the previous table.

         (3)  The crude supply contracts include force majeure clauses that have
              been exercised. Exercise of these clauses requires that the
              Company locate alternative sources of supply for its crude oil
              requirements, which has resulted in higher crude oil costs.

         (4)  CITGO acquired a participation interest in LYONDELL-CITGO, the
              owner of the Houston refinery, on July 1, 1993. In connection with
              such transaction, LYONDELL-CITGO entered into a long-term crude
              oil supply agreement with PDVSA that provided for delivery volumes
              of 135 MBPD until the completion of a refinery enhancement project
              at which time the delivery volumes increased to a range that
              extends from 200 MBPD to 230 MBPD.
</FN>
</TABLE>


                                       9

<PAGE>


         These crude oil supply agreements require PDVSA to supply minimum
quantities of crude oil and other feedstocks to CITGO for a fixed period,
usually 20 to 25 years. The supply agreements differ somewhat for each entity
and each CITGO refinery but generally incorporate formula prices based on the
market value of a slate of refined products deemed to be produced for each
particular grade of crude oil or feedstock, less (i) certain deemed refining
costs; (ii) certain actual costs, including transportation charges, import
duties and taxes; and (iii) a deemed margin, which varies according to the grade
of crude oil or feedstock delivered. Under each supply agreement, deemed margins
and deemed costs are adjusted periodically by a formula primarily based on the
rate of inflation. Because deemed operating costs and the slate of refined
products deemed to be produced for a given barrel of crude oil or other
feedstock do not necessarily reflect the actual costs and yields in any period,
the actual refining margin earned by a purchaser under the various supply
agreements will vary depending on, among other things the efficiency with which
such purchaser conducts its operations during such period.

         These crude supply agreements contain force majeure provisions which
entitle the supplier to reduce the quantity of crude oil and feedstocks
delivered under the crude supply agreements under specified circumstances. As of
December 31, 1999, PDVSA deliveries of crude oil to CITGO were less than
contractual base volumes due to PDVSA's declaration of force majeure pursuant to
all of the long-term crude oil supply contracts related to CITGO's refineries.
Therefore, the Company has been required to use alternative sources of crude
oil. As a result, CITGO estimates that crude oil costs for the year ended
December 31, 1999 were higher by $55 million from what would have otherwise been
the case. It is not possible to forecast the future financial impacts of these
reductions in crude oil deliveries on CITGO's costs because the correlation
between crude oil and refined product prices is not constant over time.
Additionally, because of among other things, changes in crude oil economics, the
duration of force majeure cannot be forecasted.

         These contracts also contain provisions which entitle the supplier to
reduce the quantity of crude oil and feedstocks delivered under the crude supply
agreements and oblige the supplier to pay CITGO the deemed margin under that
contract for each barrel of reduced crude oil and feedstocks. During the second
half of 1999, PDVSA did not deliver naphtha pursuant to one of the contracts and
made contractually specified deemed margin payments in lieu thereof. The
financial effect was an increase in costs by $4 million from what would have
otherwise been the case.

         Prior to 1995, certain costs were used in the CITGO supply agreement
formulas, aggregating approximately $70 million per year, which were to cease
being deductible after 1996. Commencing in the third quarter of 1995, a portion
of such deductions was deferred from 1995 and 1996 to the years 1997 through
1999. The effect of the adjustments to the original modifications was to reduce
the cost of crude oil purchased from PDVSA by approximately $21 million in 1999,
$25 million in 1998 and $25 million in 1997, as compared to the original
modification and without giving effect to any other factors that may affect the
amount payable for crude oil under these agreements.

         Most of the crude oil and feedstocks purchased by CITGO from PDVSA are
delivered on tankers owned by PDV Marina, S.A., a wholly-owned subsidiary of
PDVSA. In 1999, 91% of the PDVSA contract crude oil delivered to the Lake
Charles and Corpus Christi refineries was delivered on tankers operated by this
PDVSA subsidiary.

         CITGO purchases additional crude oil under a 90-day evergreen agreement
with an affiliate of Petroleos Mexicanos ("PEMEX"). CITGO's refineries are
particularly well suited to refine PEMEX's Maya heavy, sour crude oil, which is
similar in many respects to several types of Venezuelan crude oil.

         CITGO was a party to a contract with an affiliate of Occidental
Petroleum Corporation ("Occidental") for the purchase of light, sweet crude oil
to produce lubricants. This contract expired on

                                       10

<PAGE>


August 31, 1998. CITGO also purchases sweet crude oil under long-standing
relationships with numerous other producers.

         Refined Product Purchases. CITGO is required to purchase refined
products to supplement the production of the Lake Charles and Corpus Christi
refineries in order to meet demand of CITGO's marketing network. During 1999,
CITGO's shortage in gasoline production approximated 344 MBPD. However, due to
logistical needs, timing differences and product grade imbalances, CITGO
purchased approximately 691 MBPD of gasoline and sold into the spot market, or
to refined product traders or other refineries approximately 245 MBPD of
gasoline. The following table shows CITGO's purchases of refined products for
the three years in the period ended December 31, 1999.

                         CITGO Refined Product Purchases

                                           Year Ended December 31,

                               -------------------------------------------------
                                   1999              1998              1997
                               --------------    -------------     -------------
                                                    (MBPD)

   Light Fuels
        Gasoline                     691               581               518
        Jet fuel                      77                69                74
        Diesel/#2 fuel               279               208               190
                               --------------    -------------     -------------
            Total                  1,047               858               782
                               ==============    =============     =============

         As of December 31, 1999, CITGO purchased substantially all of the
gasoline, diesel and jet fuel produced at the LYONDELL-CITGO refinery under a
long-term contract which extends through the year 2017. LYONDELL-CITGO was a
major supplier in 1999 providing CITGO with 117 MBPD of gasoline, 68 MBPD of
diesel/#2 fuel and 18 MBPD of jet fuel. See "--Refining--LYONDELL-CITGO".

         As of May 1, 1997, CITGO began purchasing, under a contract with a
sixty-month term, substantially all of the refined products produced at the
PDVMR refinery. During 1999, the PDVMR refinery, located in Lemont, Illinois,
provided CITGO with 84 MBPD of gasoline, 38 MBPD of diesel/#2 fuel and 2 MBPD of
jet fuel.

         An affiliate of PDVSA acquired a 50% equity interest in a refinery in
Chalmette, Louisiana in October 1997 and has assigned to CITGO its option to
purchase up to 50% of the refined products produced at the refinery through
December 31, 2000. CITGO acquired approximately 66 MBPD of refined products from
the refinery during 1999, approximately one-half of which was gasoline.

         In October 1998 an affiliate of PDVSA acquired a 50% equity interest in
HOVENSA (a joint venture that owns and operates a refinery in St. Croix, U.S.
Virgin Islands) and has the right under a product sales agreement to assign
periodically to CITGO, or other related parties, its option to purchase 50% of
the refined products produced by HOVENSA (less a certain portion of such
products that HOVENSA will market directly in the local and Caribbean markets).
In addition, under the product sales agreement, the PDVSA affiliate has
appointed CITGO as its agent in designating which of its affiliates shall from
time to time take deliveries of the refined products available to it. The
product sales agreement will be in effect for the life of the joint venture,
subject to termination events based on default or mutual agreement. Pursuant to
the above arrangement, CITGO acquired approximately 118 MBPD of refined products
from the refinery during 1999, approximately one-half of which was gasoline.


                                       11

<PAGE>


Marketing

         CITGO's major products are light fuels (including gasoline, jet fuel,
and diesel fuel), industrial products and petrochemicals, asphalt, lubricants
and waxes. The following table shows revenue and volumes of each of these
product categories for the three years in the period ended December 31, 1999.

                CITGO Refined Product Sales Revenues and Volumes

<TABLE>
<CAPTION>
                                                   Year Ended December 31,            Year Ended December 31,
                                              ----------------------------------------------------------------------
                                                 1999        1998        1997       1999        1998        1997
                                              ----------- ----------- ----------- ---------- ----------- -----------
                                                       ($ in millions)                      (MM gallons)

Light fuels
<S>                                            <C>         <C>         <C>          <C>         <C>         <C>
     Gasoline                                  $  7,691    $  6,252    $  7,754     13,115      13,241      11,953
     Jet fuel                                     1,129         828       1,183      2,198       1,919       2,000
     Diesel / #2 fuel                             2,501       1,945       2,439      5,057       4,795       4,288
Asphalt                                             338         300         398        753         774         749
Petrochemicals and industrial products            1,024         937       1,172      2,063       2,440       1,940
Lubricants and waxes                                482         441         467        285         230         239
                                              ----------- ----------- ----------- ---------- ----------- -----------
         Total                                  $13,165     $10,703     $13,413     23,471      23,399      21,169
                                              =========== =========== =========== ========== =========== ===========
</TABLE>

         Light Fuels. Gasoline sales accounted for 58% of CITGO's refined
product sales in the years 1999, 1998 and 1997. CITGO markets CITGO branded
gasoline through approximately 13,500 independently owned and operated CITGO
branded retail outlets (including 11,471 branded retail outlets owned and
operated by approximately 816 independent marketers and 2,027 7-Eleven(TM)
convenience stores) located throughout the United States, primarily east of the
Rocky Mountains. CITGO purchases gasoline to supply its marketing network, as
the gasoline production from the Lake Charles and Corpus Christi refineries was
only equivalent to approximately 45%, 48% and 47% of the volume of CITGO branded
gasoline sold in 1999, 1998 and 1997, respectively. See "--Crude Oil and Refined
Product Purchases -- Refined Product Purchases".

         CITGO's strategy is to enhance the value of the CITGO brand to obtain
premium pricing for its products by appealing to consumer preference for quality
petroleum products and services. This is accomplished through a commitment to
quality, dependability and customer service to its independent marketers, which
constitute CITGO's primary distribution channel.

         Sales to independent branded marketers typically are made under
contracts that range from three to seven years. Sales to 7-Eleven(TM)
convenience stores are made under a contract that extends through the year 2006.
Under this contract, CITGO arranges all transportation and delivery of motor
fuels and handles all product ordering. CITGO also acts as processing agent for
the purpose of facilitating and implementing orders and purchases from
third-party suppliers. CITGO receives a processing fee for such services.

         CITGO markets jet fuel directly to airline customers at 27 airports,
including such major hub cities as Atlanta, Chicago, Dallas/Fort Worth, New York
and Miami.

         CITGO's delivery of light fuels to its customers is accomplished in
part through 50 refined product terminals located throughout CITGO's primary
market territory. Of these terminals, 38 are wholly-owned by CITGO and 12 are
jointly owned. Fourteen of CITGO's product terminals have waterborne docking
facilities, which greatly enhance the flexibility of CITGO's logistical system.
In addition, CITGO operates and delivers refined products from seven terminals
owned by PDVMR

                                       12

<PAGE>


in the Midwest. Refined product terminals owned or operated by CITGO provide a
total storage capacity of approximately 22 million barrels. Also, CITGO has
active exchange relationships with over 300 other refined product terminals,
providing flexibility and timely response capability to meet distribution needs.

         Petrochemicals and Industrial Products. CITGO sells petrochemicals in
bulk to a variety of U.S. manufacturers as raw material for finished goods. The
majority of CITGO's cumene production is sold to Mount Vernon Phenol Plant
Partnership ("MVPPP"), a joint venture phenol production plant in which CITGO is
a limited partner. The phenol plant produces phenol and acetone for sale
primarily to the principal partner in the phenol plant for the production of
plastics. Sulphur is sold to the U.S. and international fertilizer industries;
cycle oils are sold for feedstock processing and blending; natural gas liquids
are sold to the U.S. fuel and petrochemical industry; petroleum coke is sold
primarily in international markets, through a joint venture, for use as kiln and
boiler fuel; and residual fuel blendstocks are sold to a variety of fuel oil
blenders.

         Asphalt. CITGO markets asphalt through 15 terminals located along the
East Coast, from Savannah, Georgia to Albany, New York. Asphalt is sold
primarily to independent contractors for use in the construction and resurfacing
of roadways. Demand for asphalt in the Northeastern U.S. peaks in the summer
months.

         Lubricants and Waxes. CITGO markets many different types, grades and
container sizes of lubricants and wax products, with the bulk of sales
consisting of automotive oil and lubricants and industrial lubricants. Other
major lubricant products include 2-cycle engine oil and automatic transmission
fluid.

Pipeline Operations

         CITGO owns and operates 142 miles of crude oil pipeline systems and
approximately 1,021 miles of products pipeline systems. CITGO also has equity
interests in two crude oil pipeline companies with a total of approximately
1,929 miles of pipeline plus equity interests in five refined product pipeline
companies with a total of approximately 8,437 miles of pipeline. CITGO's
pipeline interests provide it with access to substantial refinery feedstocks and
reliable transportation to refined product markets, as well as cash flows from
dividends. One of the refined product pipelines in which CITGO has an interest,
Colonial Pipeline, is the largest refined product pipeline in the United States,
transporting refined products from the Gulf Coast to the mid-Atlantic and
eastern seaboard states.

Employees

         CITGO and its subsidiaries have a total of approximately 4,200
employees, approximately 1,700 of who are covered by 15 union contracts.
Approximately 1,600 of the union employees are employed in refining operations.
The remaining union employees are located primarily at a lubricant plant and
various refined product terminals.

PDV Midwest Refining, L.L.C.

Refining

         PDVMR produces light fuels, petrochemicals and industrial products at
its refinery in Lemont, Illinois. The refinery has a crude distillation capacity
of 167 MBPD and has a Solomon Process Complexity Rating of 11.6 (as compared to
an average of 13.6 for U.S. refineries in the most recently available Solomon
Associates, Inc., survey).

                                       13

<PAGE>


         The following table shows refining capacity, refinery input and product
yield at the Lemont refinery for the three years in the period ended December
31, 1999.

                           Lemont Refinery Production

<TABLE>
<CAPTION>
                                                                   Year Ended December 31,
                                         ----------------------------------------------------------------------------
                                                  1999                      1998                      1997
                                         ------------------------  ------------------------  ------------------------
                                                            (MBPD, except as otherwise indicated)

<S>                                           <C>           <C>         <C>           <C>         <C>          <C>
Rated Refining Capacity at year end           167                       167                       160

Refinery Input
    Crude oil                                 146           90%         148           91%         151          89%
    Other feedstocks                           17           10%          15            9%          17          11%
                                         ------------ -----------  ------------ -----------  ----------- ------------
       Total                                  163          100%         163          100%         168         100%
                                         ============ ===========  ============ ===========  =========== ============

Product Yield
    Light fuels                                84           51%          79           49%          87          52%
    Gasoline                                    2            1%           3            2%           3           2%
    Jet fuel                                   37           23%          41           25%          39          24%
    Diesel/#2 fuel                             40           25%          38           24%          37          22%
                                         ------------ -----------  ------------ -----------  ----------- ------------
    Industrial Products & Petrochemicals      163          100%         161          100%         166         100%
                                         ============ ===========  ============ ===========  =========== ============
       Total

Utilization of Rated Refining Capacity                       87%                       89%                       94%
</TABLE>

         The average API gravity of the composite crude slate run at the Lemont
refinery is approximately 27 degrees. Crude oil is supplied to the refinery by
pipeline.

         Petrochemical products at the Lemont refinery include benzene, toluene
and xylene, plus a range of ten different aliphatic solvents.

         PDVMR owns a 25% interest in a partnership which operates a needle
coker production facility adjacent to the Lemont refinery (the "Needle Coker").
The remaining 75% interest is held by various subsidiaries of Union Oil Company
of California.

Crude Oil Purchases

         PDVMR owns no crude oil reserves or production facilities and,
therefore, relies on purchases of crude oil for its refining operations. A
portion of the crude oil refined at the Lemont refinery is supplied by PDVSA
under a crude oil supply agreement, effective as of April 23, 1997, that expires
in the year 2002 and thereafter is renewable annually. The contract calls for
delivery of a guaranteed volume of up to 100 MBPD; however, PDVMR is not
required to purchase a set minimum. In 1999, the crude oil processed at the
Lemont refinery was 21 percent Venezuelan, 62 percent Canadian and 17 percent
from other sources.

Marketing

         Subsequent to the transfer of assets on May 1, 1997, substantially all
of PDVMR's products are sold to and marketed by CITGO. (See "Item 13. Certain
Relationships and Related Transactions".)

                                       14

<PAGE>


Employees

         PDVMR has no employees. CITGO operates the Lemont refinery and provides
all administrative functions to the Company pursuant to a Refinery Operating
Agreement (as defined below).

Refinery Operating Agreement with CITGO

         CITGO operates the Lemont refinery in accordance with a Refinery
Operating Agreement (the "Refinery Operating Agreement") between CITGO and
PDVMR. The Refinery Operating Agreement sets out the duties, obligations and
responsibilities of the operator and the Company with respect to the operation
of the refinery. CITGO provides all administrative functions to the Company,
including cash management, legal and accounting services. The term of the
agreement is 60 months, commencing May 1, 1997, and shall be automatically
renewed for periods of 12 months (subject to early termination as provided in
the Refinery Operating Agreement). (See "Item 13--Certain Relationships and
Related Transactions".)

Environment and Safety

         Environment - General

         Beginning in 1994, the U.S. refining industry was required to comply
with stringent product specifications under the 1990 Clean Air Act ("CAA")
Amendments for reformulated gasoline and low sulphur diesel fuel which
necessitated additional capital and operating expenditures, and altered
significantly the U.S. refining industry and the return realized on refinery
investments. In addition, numerous other factors affect the Companies' plans
with respect to environmental compliance and related expenditures. See "Factors
Affecting Forward Looking Statements".

         In addition, the Companies are subject to various federal, state and
local environmental laws and regulations which may require the Companies to take
action to correct or improve the effects on the environment of prior disposal or
release of petroleum substances by the Companies or other parties. Management
believes the Companies are in compliance with these laws and regulations in all
material aspects. Maintaining compliance with environmental laws and regulations
in the future could require significant capital expenditures and additional
operating costs.

         Based on currently available information, including the continuing
participation of former owners in remediation actions and indemnification
agreements with third parties, the Companies' management believes that its
current accruals are sufficient to address the Companies' environmental clean-up
obligations. Conditions which require additional expenditures may exist for
various of the Companies' sites including, but not limited to, the Companies'
operating refinery complexes, closed refineries, service stations and crude oil
and petroleum product storage terminals. The amount of such future expenditures,
if any, is indeterminable.

         Environment -- CITGO

         In 1992, CITGO reached an agreement with a state agency to cease usage
of certain surface impoundments at CITGO's Lake Charles refinery by 1994. A
mutually acceptable closure plan was filed with the state in 1993. CITGO and its
former owner are participating in the closure and sharing the related costs
based on estimated contributions of waste and ownership periods. The remediation
commenced in December 1993. In 1997, CITGO presented a proposal to a state
agency revising the 1993 closure plan. In 1998 and 2000, CITGO submitted further
revisions as requested by the state agency. A ruling on the proposal, as
amended, is expected in 2000 with final closure to begin in 2002.

                                       15

<PAGE>


         In 1992, an agreement was reached between CITGO and its former owner
concerning a number of environmental issues. The agreement consisted, in part,
of payments to CITGO totaling $46 million. The former owner will continue to
share the costs of certain specific environmental remediation and certain tort
liability actions based on ownership periods and specific terms of the
agreement.

         The Texas Natural Resources Conservation Commission ("TNRCC") conducted
an environmental compliance review at the Corpus Christi refinery in the first
and second quarters of 1998. In January 1999, the TNRCC issued to CITGO a Notice
of Violation ("NOV") arising from this review and in October 1999 proposed fines
of approximately $1.6 million related to the NOV. Most of the alleged violations
refer to recordkeeping and reporting issues, failure to meet required emission
levels, and failure to properly monitor emissions. TNRCC issued to CITGO another
NOV in December 1999 based on its 1999 audit which cites items similar to those
cited earlier and the agency has tentatively suggested that the two audits
should be combined for resolution. CITGO intends to vigorously protest the
alleged violations and proposed fines.

         In June 1999, CITGO and numerous other industrial companies received
notice from the U.S. Environmental Protection Agency, ("EPA") that the EPA
believes these companies have contributed to contamination in the Calcasieu
Estuary, in the proximity of Lake Charles, Calcasieu Parish, Louisiana and are
Potentially Responsible Parties ("PRPs") under the Comprehensive Environmental
Response, Compensation, and Liability Act ("CERCLA"). The EPA made a demand for
payment of its past investigation costs from CITGO and other PRPs and advised it
intends to conduct a Remedial Investigation/Feasibility Study ("RI/FS") under
its CERCLA authority. CITGO and other PRPs may be potentially responsible for
the costs of the RI/FS. CITGO disagrees with the EPA's allegations and intends
to contest this matter.

         In October 1999, the EPA issued a NOV to CITGO for violations of
federal regulations regarding reformulated gasoline found during a May 1998
inspection at CITGO's Braintree, Massachusetts terminal and recommended a
penalty of $218,500. CITGO intends to vigorously contest the alleged violations
and proposed fines.

         Based on currently available information, including the continuing
participation of former owners in remediation actions and indemnification
agreements with third parties, CITGO management believes that its accruals are
sufficient to address its environmental obligations. Conditions which require
additional expenditures may exist with respect to various Company sites
including, but not limited to, CITGO's operating refinery complexes, closed
refineries, service station sites and crude oil and petroleum product storage
terminals. The amount of such future expenditures, if any, is indeterminable.

         Increasingly stringent regulatory provisions periodically require
additional capital expenditures. During 1999, CITGO spent approximately $81
million for environmental and regulatory capital improvements in its operations.
Management currently estimates that CITGO will spend approximately $350 million
for environmental and regulatory capital projects over the five-year period
2000-2004. These estimates may vary due to a variety of factors. See "Item 7 --
Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity and Capital Resources". See also "Factors Affecting
Forward Looking Statements".

         Environment -- PDVMR

         In accordance with the Partnership Interest Retirement Agreement, the
Company, VPHI Midwest, Inc., a subsidiary of the Company, and PDVMR assumed
joint and several liability for all environmental matters relating to past
operations of UNO-VEN.

                                       16

<PAGE>


         In November 1999, the Attorney General's Officer of Illinois filed a
complaint in the 12th Judicial Circuit Court, Will County, Illinois against PDV
Midwest Refining and CITGO Petroleum Corporation alleging damages from several
releases to the air of contaminants from the Lemont, Illinois refinery. The
initial complaint addressed alleged violations and potential compliance actions.
The Attorney General's office later made a demand for penalties of approximately
$150,000. While CITGO and PDVMR disagree with the Attorney General's alleged
violations and proposed penalty demand, they are cooperating with the agency and
anticipate reaching an agreement with the agency to resolve this lawsuit by late
2000.

         Safety

         Due to the nature of petroleum refining and distribution, CITGO and
PDVMR are subject to stringent occupational health and safety laws and
regulations. CITGO and PDVMR maintain comprehensive safety, training and
maintenance programs. PDV America believes that it is in substantial compliance
with occupational health and safety laws.

ITEM 3.  Legal Proceedings

         Various lawsuits and claims arising in the ordinary course of business
are pending against the Companies. The Companies record accruals for potential
losses when, in management's opinion, such losses are probable and reasonably
estimable. If known lawsuits and claims were to be determined in a manner
adverse to the Companies, and in amounts greater than the accruals of the
Companies, then such determinations could have a material adverse effect on the
results of operations of the Companies in a given reporting period. However, in
management's opinion, the ultimate resolution of these lawsuits and claims will
not exceed, by a material amount, the amount of the accruals and the insurance
coverage available to the Companies. This opinion is based upon management's and
counsel's current assessment of these lawsuits and claims. The most significant
lawsuits and claims are discussed below.

         Litigation is pending in federal court in Lake Charles, Louisiana,
against CITGO by a number of current and former Lake Charles refinery employees
and applicants asserting claims of racial discrimination in connection with
CITGO's employment practices. The first trial in this case, which involved two
plaintiffs, began in October 1999 and resulted in verdicts for CITGO. The Court
granted CITGO's motion for summary judgment with respect to another group of
claims; an appeal of this ruling is expected. Trials of the remaining cases are
currently stayed.

         The case brought in the United States District Court for the Northern
District of Illinois by the Oil Chemical & Atomic Workers, Local 7-517 against
UNO-VEN, CITGO, PDVSA, PDV America, and Union Oil Company of California pursuant
to Section 301 of the Labor Management Relations Act ("LMRA") resulted in the
court's ruling in favor of all defendants on Motions for Summary Judgment in
June, 1998; this ruling was affirmed on appeal and the case is now terminated.

         In the case of Francois Oil Company, Inc. versus Stop-N'-Go of Madison,
Inc., et al. filed in federal district court in Wisconsin, Stop-N'-Go, a former
UNO-VEN marketer, sued UNO-VEN for $1 million, alleging that UNO-VEN had
fraudulently induced it to breach a supply contract with Francois Oil. UNO-VEN's
motion for summary judgment was granted in September, 1998; this ruling was
affirmed on appeal, terminating this case.

         Four former UNO-VEN marketers have filed a class action complaint
against UNO-VEN alleging improper termination of the UNO-VEN Marketer Sales
Agreement under the Petroleum Marketing

                                       17

<PAGE>


Practices Act in connection with PDVMR's 1997 acquisition of Unocal's interest
in UNO-VEN. The lawsuit is pending in U.S. District Court in Wisconsin and is in
the discovery phase.

         PDVMR and the Company, jointly and severally, have agreed to indemnify
UNO-VEN and certain other related entities against certain liabilities and
claims, including the preceding two matters.

         In May 1997, an explosion and fire occurred at CITGO's Corpus Christi
refinery. No serious personal injuries were reported. CITGO received
approximately 7,500 individual claims for personal injury and property damages
related to the above noted incident. Approximately 1,300 of these claims have
been resolved for amounts which individually and collectively were not material.
There are presently seventeen lawsuits filed on behalf of approximately 9,000
individuals arising out of this incident in federal and state courts in Corpus
Christi alleging property damages, personal injury and punitive damages. A trial
of one of the federal court lawsuits in October 1998 involving ten bellwether
plaintiffs, out of approximately 400 plaintiffs, resulted in a verdict for
CITGO. The remaining plaintiffs in this case have agreed to settle for an
immaterial amount.

         A class action lawsuit is pending in Corpus Christi, Texas, state court
against CITGO and other operators and owners of nearby industrial facilities
which claims damages for reduced value of residential properties located in the
vicinity of the industrial facilities as a result of air, soil and groundwater
contamination. CITGO has contracted to purchase all of the 275 properties
included in the lawsuit which are in an area adjacent to CITGO's Corpus Christi
refinery and settle the property damage claims relating to these properties.
Related to this purchase, $15.7 million was expensed in 1997. The trial judge
recently ruled, over CITGO's objections, that a settlement agreement CITGO
entered into in September 1997 and subsequently withdrew from, which provided
for settlement of the remaining property damage claims for $5 million, is
enforceable, CITGO believes this ruling is erroneous and will appeal. The trial
against CITGO of these remaining claims will be postponed indefinitely. Two
related personal injury and wrongful death lawsuits were filed against the same
defendants in 1996, one of which is scheduled for trial in 2000. A trial date
for the other case has not been set.

         CITGO is among defendants to lawsuits in California, North Carolina and
New York alleging contamination of water supplies by methyl tertiary butyl ether
("MTBE"), a component of gasoline. The action in California was filed in
November 1998 by the South Tahoe Public Utility District and CITGO was added as
a defendant in February 1999. The North Carolina case, filed in January 1999,
and the New York case, filed in January 2000, are putative class actions on
behalf of owners of water wells and other drinking water supplies in the states.
All of these actions allege that MTBE poses public heath risks. These matters
are in early stages of discovery. CITGO has denied all of the allegations and is
pursuing its defenses.

ITEM 4.  Submission of Matters to a Vote of Security Holders

         Not Applicable.




                                       18

<PAGE>


                                     PART II

ITEM 5.  Market for Registrant's Common Equity and Related Stockholder Matters

         The Company's common stock is not publicly traded. All of the Company's
common stock is held by PDV Holding, Inc., a Delaware corporation whose ultimate
parent is PDVSA. In 1999, PDV America declared and paid dividends of $22 million
to PDV Holding, Inc.

ITEM 6.  Selected Financial Data

         The following table sets forth certain selected historical consolidated
financial and operating data of PDV America as of the end of and for each of the
five years in the period ended December 31, 1999. The following table should be
read in conjunction with the consolidated financial statements of PDV America as
of December 31, 1999 and 1998, and for each of the three years in the period
ended December 31, 1999, included in "Item 8. Financial Statements and
Supplementary Data".

<TABLE>
<CAPTION>
                                                                       Year Ended December 31,
                                                  -------------------------------------------------------------------
                                                     1999          1998          1997          1996        1995(1)
                                                  -----------   -----------   -----------   -----------   -----------
                                                                           ($ in millions)
<S>                                                <C>           <C>           <C>           <C>           <C>
Income Statement Data
     Sales                                         $13,332       $10,960       $13,622       $12,952       $10,522
     Equity in earnings (losses) of affiliates          22            82            69            45            48
     Net revenues                                   13,410        11,107        13,754        13,071        10,647
     Income before extraordinary gain                  142           231           228           138           143
     Extraordinary gain(2)                               -             -             -             -             3
     Net income                                        142           231           228           138           146
     Other comprehensive income (loss)                  (3)            -             -             -             -
     Comprehensive income                              139           231           228           138           146
Ratio of Earnings to Fixed Charges (3)                2.52x         3.06x         2.58x         1.91x         2.02x
Balance Sheet Data
     Total assets                                   $7,746        $7,075        $7,244        $6,938       $ 6,220
     Long-term debt (excluding current portion)(4)   2,096         2,174         2,164         2,595         2,297
     Total debt (5)                                  2,442         2,273         2,526         2,755         2,428
     Shareholder's equity                            2,718         2,601         2,589         2,111         1,973

--------------------
<FN>
(1) Includes operations of Cato Oil & Grease Company since May 1, 1995.

(2)  Represents extraordinary gain or (charges) for the early extinguishment of
     debt (net of related income tax provision of $2 million) in 1995.

(3)  For the purpose of calculating the ratio of earnings to fixed charges,
     "earnings" consist of income before income taxes and cumulative effect of
     accounting changes plus fixed charges (excluding capitalized interest),
     amortization of previously capitalized interest and certain adjustments to
     equity in income of affiliates. "Fixed charges" include interest expense,
     capitalized interest, amortization of debt issuance costs and a portion of
     operating lease rent expense deemed to be representative of interest.

(4)  Includes long-term debt to third parties, note payable to affiliate and
     capital lease obligations.

(5)  Includes short-term bank loans, current portion of capital lease
     obligations and long-term debt, long-term debt and capital lease
     obligations.
</FN>
</TABLE>


                                       19

<PAGE>


ITEM 7.  Management's Discussion and Analysis of Financial Condition and Results
of Operations

Overview

         The following discussion of the financial condition and results of
operations of PDV America should be read in conjunction with the consolidated
financial statements of PDV America included elsewhere herein.

         Petroleum industry operations and profitability are influenced by a
large number of factors, some of which individual petroleum refining and
marketing companies cannot entirely control. Governmental regulations and
policies, particularly in the areas of taxation, energy and the environment,
have a significant impact on petroleum activities, regulating how companies
conduct their operations and formulate their products, and, in some cases,
limiting their profits directly. Demand for crude oil and refined products is
largely driven by the condition of local and worldwide economies, although
weather patterns and taxation relative to other energy sources also play a
significant part. PDV America's consolidated operating results are affected by
these industry-specific factors and by company-specific factors, such as the
success of marketing programs and refinery operations.

         The earnings and cash flows of companies engaged in the refining and
marketing business in the United States are primarily dependent upon producing
and selling quantities of refined products at margins sufficient to cover fixed
and variable costs. The refining and marketing business is characterized by high
fixed costs resulting from the significant capital outlays associated with
refineries, terminals and related facilities. This business is also
characterized by substantial fluctuations in variable costs, particularly costs
of crude oil, feedstocks and blending components, and in the prices realized for
refined products. Crude oil and refined products are commodities whose price
levels are determined by market forces beyond the control of the Companies.

         In general, prices for refined products are significantly influenced by
the price of crude oil, feedstocks and blending components. Although an increase
or decrease in the price for crude oil, feedstocks and blending components
generally results in a corresponding increase or decrease in prices for refined
products, generally there is a lag in the realization of the corresponding
increase or decrease in prices for refined products. The effect of changes in
crude oil prices on PDV America's consolidated operating results therefore
depends in part on how quickly refined product prices adjust to reflect these
changes. A substantial or prolonged increase in crude oil prices without a
corresponding increase in refined product prices, or a substantial or prolonged
decrease in refined product prices without a corresponding decrease in crude oil
prices, or a substantial or prolonged decrease in demand for refined products
could have a significant negative effect on the Companies' earnings and cash
flows. CITGO purchases a significant amount of its crude oil requirements from
PDVSA under long-term supply agreements (expiring in the years 2006 through
2013). This supply represented approximately 48% of the crude oil processed in
refineries operated by CITGO in the year ended December 31, 1999. The crude
supply contracts include force majeure clauses that have been exercised. The
exercise of these clauses requires that the Company use alternative sources of
supply for its crude oil requirements, and such action resulted in higher crude
oil costs. (See Items 1. And 2. Business and Properties -- Crude Oil and Refined
Product Purchases). CITGO also purchases significant volumes of refined products
to supplement the production from its refineries to meet marketing demands and
to resolve logistical issues. PDV America's earnings and cash flows are also
affected by the cyclical nature of petrochemical prices. As a result of the
factors described above, the earnings and cash flows of PDV America may
experience substantial fluctuations. Inflation was not a significant factor in
the operations of PDV America during the three years ended December 31, 1999.


                                       20

<PAGE>


         CITGO's revenues accounted for approximately 99% of PDV America's
consolidated revenues in 1999, 1998 and 1997. PDVMR's sales of $1,205 million
for the period ended December 31, 1999 were primarily to CITGO and, accordingly,
these were eliminated in consolidation.

         The following table summarizes the sources of PDV America's sales
revenues and volumes.

                      PDV America Sales Revenue and Volumes

<TABLE>
<CAPTION>
                                               Year Ended December 31,                Year Ended December 31,
                                         -------------------------------------  -------------------------------------
                                            1999         1998         1997         1999         1998         1997
                                         -----------  -----------  -----------  -----------   ----------   ----------
                                                   ($ in millions)                          (MM gallons)

<S>                                       <C>          <C>          <C>            <C>           <C>          <C>
Gasoline                                  $  7,691     $  6,252     $  7,754       13,115        13,241       11,953
Jet fuel                                     1,129          828        1,183        2,198         1,919        2,000
Diesel / #2 fuel                             2,501        1,945        2,439        5,057         4,795        4,288
Asphalt                                        338          300          398          753           774          749
Petrochemicals and industrial products       1,041          952        1,178        2,306         2,658        1,961
Lubricants and waxes                           482          441          467          285           230          239
                                         -----------  -----------  -----------  -----------   ----------   ----------
         Total refined product sales       $13,182      $10,718      $13,419       23,714        23,617       21,190
Other sales                                    150          242          203            -             -            -
                                         -----------  -----------  -----------  -----------   ----------   ----------
         Total sales                       $13,332      $10,960      $13,622       23,714        23,617       21,190
                                         ===========  ===========  ===========  ===========   ==========   ==========
</TABLE>

         The following table summarizes PDV America's cost of sales and
operating expenses.

                PDV America Cost of Sales and Operating Expenses

<TABLE>
<CAPTION>
                                                                           Year Ended December 31,
                                                                   ----------------------------------------
                                                                      1999          1998          1997
                                                                   ------------  ------------  ------------
                                                                               ($ in millions)
<S>                                                                 <C>           <C>           <C>
Crude oil                                                           $   3,804     $   2,571     $   3,552
Refined products                                                        6,640         5,102         6,739
Intermediate feedstocks                                                   990           900         1,240
Refining and manufacturing costs                                          999           949           940
Other operating costs and expenses and inventory changes                  374           784           527
                                                                   ------------  ------------  ------------
     Total cost of sales and operating expenses                      $ 12,807      $ 10,306      $ 12,998
                                                                   ============  ============  ============
</TABLE>

Results of Operations -- 1999 Compared to 1998

         Sales revenues and volumes. Sales increased $2,372 million,
representing a 22% increase from 1998 to 1999. This was due to an increase in
average sales price of 22% while sales volume remained flat. (See PDV America
Sales Revenues and Volumes table above.)

         Equity in earnings of affiliates. Equity in earnings of affiliates
decreased by approximately $60 million, or 73% from $82 million in 1998 to $22
million in 1999. The decrease was primarily due to the change in the earnings of
LYONDELL-CITGO, CITGO's share of which decreased $58 million, from $59 million
in 1998 to $1 million in 1999. The decrease in LYONDELL-CITGO earnings was due
primarily to reduced processing of extra heavy crude oil as a result of lower
allocations and deliveries and a less favorable mix of extra heavy Venezuelan
crude oil by PDVSA, partially offset by increased

                                       21

<PAGE>


processing of spot crude; costs and lower operating rates related to outages of
a coker unit and a fluid catalytic cracker unit; and a charge related to
LYONDELL-CITGO's renegotiated labor agreement.

         Other income (expense). Other expense was $27 million for the year
ended December 31, 1999 as compared to $9 million for the same period in 1998.
The difference was primarily due to: (1) a $3 million gain on the sale of
Petro-Chemical Transport in 1998, (2) in September 1999, CITGO's interest in the
Texas New Mexico Pipeline was sold for a loss of $(2) million, and (3) a $7
million loss related to the sale of various PDVMR properties.

         Cost of sales and operating expenses. Cost of sales and operating
expenses increased by $2,501 million, or 24%, from 1999 to 1998. (See PDV
America Cost of Sales and Operating Expenses table above.)

         The Companies purchase refined products to supplement the production
from their refineries to meet marketing demands and resolve logistical issues.
The refined product purchases represented 52% and 50% of cost of sales for the
years 1999 and 1998, respectively. These refined product purchases included
purchases from LYONDELL-CITGO, Chalmette and HOVENSA. The Companies estimate
that margins on purchased products, on average, are lower than margins on
produced products due to the fact that the Companies can only receive the
marketing portion of the total margin received on the produced refined products.
However, purchased products are not segregated from the Companies produced
products and margins may vary due to market conditions and other factors beyond
the Companies' control. As such, it is difficult to measure the effects on
profitability of changes in volumes of purchased products. In the near term,
other than normal refinery turnaround maintenance, the Companies do not
anticipate operational actions or market conditions which might cause a material
change in anticipated purchased product requirements; however, there could be
events beyond the control of the Companies which impact the volume of refined
products purchased. See also "Factors Affecting Forward Looking Statements".

         As a result of the invocation of the force majeure clause in its crude
oil supply contracts, the Companies estimate that the cost of crude oil
purchased in 1999 increased by $55 million from what would have otherwise been
the case.

         Gross margin. The gross margin for 1999 was $525 million, or 3.9%,
compared to $655 million, or 6.0%, for 1998. In 1999, the revenue per gallon
component increased approximately 22% while the cost per gallon component
increased approximately 23%. As a result, the gross margin decreased
approximately one-tenth of a cent on a per gallon basis in 1999 compared to
1998.

         Selling, general and administrative expenses. Selling, general and
administrative expenses decreased $21 million, or 8% in 1999, as a result of the
Companies' efforts to reduce such expenses and the reduction in employee
incentive compensation.

         Income taxes. PDV America's provision for income taxes in 1999 was $58
million, representing an effective tax rate of 29%. In 1998, PDV America's
provision for income taxes was $131 million, representing an effective tax rate
of 36%. The effective tax rate for the current year is unusually low due to a
favorable resolution in the second quarter of 1999 of a significant tax issue in
the last Internal Revenue Service audit. During the years under audit, deferred
taxes were recorded for certain environmental expenses deducted in the tax
returns pending final determination by the Internal Revenue Service. The
deductions were allowed on audit and, accordingly, the deferred tax liability of
approximately $11 million was reversed with a corresponding benefit to tax
expense.


                                       22

<PAGE>


Results of Operations -- 1998 Compared to 1997

         Sales revenues and volumes. Sales decreased by $2,662 million,
representing a 20% decrease from 1997 to 1998. This was due to a decrease in
average sales price of 28% partially offset by an increase in sales volumes of
12%. (See PDV America Sales Revenues and Volumes table above.)

         Equity in earnings (losses) of affiliates. Equity in earnings of
affiliates increased by approximately $13 million, or 18.8% from $69 million in
1997 to $82 million in 1998. This increase was due primarily to a $14 million
increase in CITGO's equity in earnings of LYONDELL-CITGO as a result of the
change in CITGO's interest in LYONDELL-CITGO which increased from approximately
13% at December 31, 1996 to approximately 42% on April 1, 1997 and the
improvement in LYONDELL-CITGO's operations since completion of its refinery
enhancement project during the first quarter of 1997. (See Consolidated
Financial Statements of PDV America - Note 2 in Item 14a.)

         Cost of sales and operating expenses. Cost of sales and operating
expenses decreased by $2,692 million, or 21% from 1997 to 1998. (See PDV America
Cost of Sales and Operating Expense table above.)

         The Companies purchase refined products to supplement the production
from their refineries to meet marketing demands and resolve logistical issues.
The refined product purchases represented 50% and 52% of the cost of sales for
the years 1998 and 1997, respectively. These refined product purchases included
purchases from LYONDELL-CITGO, Chalmette and HOVENSA. The Companies estimate
that margins on purchased products, on average, are lower than margins on
products due to the fact that the Companies can only receive the marketing
portion of the total margin received on the produced refined products. However,
purchased products are not segregated from the Companies' produced products and
margins may vary due to market conditions and other factors beyond the
Companies' control. As such, it is difficult to measure the effects on
profitability of changes in volumes of purchased products. The Companies
anticipate their purchased product requirements will increase, in volume and as
a percentage of refined products sold, in order to meet marketing demands,
although in the near term, other than normal refinery turnaround maintenance,
the Companies do not anticipate operational actions or market conditions which
might cause a material change in anticipated purchased product requirements;
however, there could be events beyond the control of the Companies which impact
the volume of refined products purchased. See also "Factors Affecting Forward
Looking Statements".

         Gross margin. The gross margin for 1998 was $655 million compared to
$625 million for 1997. Gross margins in 1998 were positively affected by a 12%
increase in sales volume partially offset by an erosion of gross margin on a per
gallon basis which included a lower of cost or market adjustment of $172
million.

         Selling, general and administrative expenses. Selling, general and
administrative expenses increased $47 million, or 22% in 1998. The increase was
due primarily to salary and related burden allocations as well as increases in
advertising expense and depreciation.

         Interest expense. Interest expense decreased $29 million from 1997 to
1998. The decrease was primarily due to the decrease in average debt outstanding
related to a decrease in working capital requirements and the deferral of a
significant 1998 excise tax payment, as well as the repayment of $250 million of
the Company's Senior Notes on August 1, 1998. Also the average interest rate
decreased due to a decrease in key rates and replacement of higher rate debt
with lower rate debt.

         Income taxes. PDV America's provision for income taxes in 1998 was $131
million, representing an effective tax rate of 36%. In 1997, PDV America's
provision for income taxes was $106 million,

                                       23

<PAGE>


representing an effective tax rate of 32%. The relatively low rate in 1997 was
due primarily to the favorable resolution of a significant tax issue with the
Internal Revenue Service in the second quarter of 1997. The resolution resulted
in the reduction of a contingency reserve previously established related to this
matter. The decrease was partially offset by the recording of a valuation
allowance related to a capital loss carryforward. In 1998 the effective tax rate
decreased slightly compared to the 1996 rate due to a decrease in state taxes.

Liquidity and Capital Resources

         For the year ended December 31, 1999, PDV America's net cash provided
by operating activities totaled approximately $225 million, primarily reflecting
$142 million of net income, $277 million of depreciation and amortization and
the net effect of other items of $(194) million. The more significant changes in
other items included the increase in accounts receivable, including receivables
from affiliates, of approximately $457 million, the increase in inventories of
approximately $263 million, the increase in accounts payable and other current
liabilities, including payables to affiliates, of approximately $406 million and
the increase of other assets of approximately $66 million.

         Net cash used in investing activities in 1999 totaled $287 million
consisting primarily of capital expenditures of $248 million, loans to
LYONDELL-CITGO of $25 million and loan to PDVSA Finance of $38 million.

         During the same period, consolidated net cash provided by financing
activities totaled approximately $141 million comprised primarily of $252
million of proceeds from revolving bank loans, offset by net repayments of other
debt of $89 million and a $22 million dividend paid to PDV Holding, Inc.

         The Companies currently estimate that their capital expenditures for
the years 2000 through 2004 will total approximately $2 billion. These include:

       PDV America Estimated Capital Expenditures - 2000 through 2004 (1)

       Strategic                                          $   657 million
       Maintenance                                            483 million
       Regulatory / Environmental                             712 million
                                                         -----------------
                Total                                      $1,852 million
                                                         =================
       --------------------
       (1) These estimates may change as future regulatory events unfold.
           See "Factors Affecting Forward Looking Statements".

         PDV America's notes receivable from PDVSA are unsecured and are
comprised of $250 million of 7.75% notes maturing on August 1, 2000 and $500
million of 7.995% notes maturing on August 1, 2003.

         The notes receivables from affiliate (PDVSA Finance Ltd., a wholly
owned subsidiary of PDVSA), are unsecured and are comprised of two $130 million
8.558% notes maturing on November 10, 2013 and a $38 million 10.395% note
maturing on May 15, 2014.

         As of December 31, 1999, PDV America and its subsidiaries had an
aggregate of $2,340 million of indebtedness outstanding that matures on various
dates through the year 2029. As of December 31, 1999, the Companies' contractual
commitments to make principal payments on this indebtedness were $330 million,
$72 million and $111 million for 2000, 2001 and 2002, respectively.

                                       24

<PAGE>


         PDV America's $750 million senior notes issued in 1993 are comprised of
(i) $250 million of 7.75% Senior Notes due August 1, 2000 and (ii) $500 million
7.875% Senior Notes due August 1, 2003 (collectively, the "Senior Notes").
Interest on these notes is payable in semiannual installments. PDV America
repaid on August 1, 1998 the $250 million 7.25% Senior Notes due August 1, 1998,
with the proceeds received from the maturity of $250 million of Mirror Notes due
from PDVSA on July 31, 1998.

         CITGO's bank credit facility consists of a $400 million, five-year,
revolving bank loan and a $150 million, 364-day, revolving bank loan, both of
which are unsecured and have various borrowing maturities, of which $345 million
was outstanding at December 31, 1999. Cit-Con has a separate credit agreement
under which $14 million was outstanding at December 31, 1999. The Company's
other principal indebtedness consists of (i) $200 million in senior notes issued
in 1996, (ii) $260 million in senior notes issued pursuant to a master shelf
agreement with an insurance company, (iii) $137 million in senior notes issued
in 1991, (iv) $306 million in obligations related to tax exempt bonds issued by
various governmental units, and (v) $178 million in obligations related to
taxable bonds issued by a governmental unit. (See Consolidated Financial
Statements of PDV America -- Note 1 and 10 in Item 14a.)

         PDVMR's bank credit facility consists of a $125 million revolving
credit facility, committed through April 2002, of which $117 million was
outstanding at December 31, 1999. Other indebtedness consists of $20 million in
pollution control bonds. (See Consolidated Financial Statements of PDV America
-- Note 10 in Item 14a.)

         As of December 31, 1999, capital resources available to the Companies
included cash provided by operations, available borrowing capacity of $205
million under CITGO's revolving credit facility and $184 million in unused
availability under uncommitted short-term borrowing facilities with various
banks and $8 million in unused availability under PDVMR's revolving credit
facility with various banks. Additionally, the remaining $400 million from
CITGO's shelf registration with the Securities and Exchange Commission for $600
million of debt securities may be offered and sold from time to time. The
Companies believe that they have sufficient capital resources to carry out
planned capital spending programs, including regulatory and environmental
projects in the near term, and to meet currently anticipated future obligations
as they arise. In addition, PDV America intends that payments received from
PDVSA under the Mirror Notes will provide funds to service PDV America's Senior
Notes. The Companies periodically evaluate other sources of capital in the
marketplace and anticipate long-term capital requirements will be satisfied with
current capital resources and future financing arrangements, including the
issuance of debt securities. The Companies' ability to obtain such financing
will depend on numerous factors, including market conditions and the perceived
creditworthiness of the Companies at that time. See "Factors Affecting Forward
Looking Statements".

         The debt instruments of PDV America, PDVMR and CITGO impose
restrictions on PDV America's, PDVMR's and CITGO's ability to incur additional
debt, grant liens, make investments, sell or acquire fixed assets, make
restricted payments and engage in other transactions. In addition, restrictions
exist over the payment of dividends and other distributions to PDV America from
CITGO. PDV America, PDVMR and CITGO were in compliance with all their respective
covenants under such debt instruments at December 31, 1999.

         The Companies are members of the PDV Holding, Inc. consolidated Federal
income tax return. CITGO has a tax allocation agreement with PDV America, which
is designed to provide PDV America with sufficient cash to pay its consolidated
income tax liabilities.



                                       25

<PAGE>


New Accounting Standard

         In June 1998, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 133, "Accounting for Derivative
Instruments and Hedging Activities" ("SFAS No. 133"). The statement establishes
accounting and reporting standards for derivative instruments and for hedging
activities. It requires that an entity recognize all derivatives, at fair value,
as either assets or liabilities in the statement of financial position with an
offset either to shareholder's equity and comprehensive income or income
depending upon the classification of the derivative. The company has not
determined the impact on its financial statements that may result from adoption
of SFAS No. 133, which is required no later than January 1, 2001.

Impending Accounting Change

         The Securities and Exchange Commission ("SEC") has recently indicated
that they intend to issue a summary of their views regarding accounting for
planned major maintenance activities (See Consolidated Financial Statements of
PDV America -- Note 1 in Item 14a). Such summary is expected, in part, to defer
the issuance of guidance related to certain aspects of accounting for major
maintenance activities pending completion of a project dealing with cost
capitalization that will be conducted by the Accounting Standards Executive
Committee ("AcSEC") of the American Institute of Certified Public Accountants.
At December 31, 1999 the Companies had capitalized approximately $107 million of
such costs, all or a portion of which may be required to be written off through
an immediate charge to income as a result of the SEC and/or AcSEC conclusions.
Pending issuance of the SEC summary, the Companies plan to continue their policy
of deferring and amortizing such costs.

Year 2000 Readiness

         The inability of computers, software and other equipment using
microprocessors to recognize and properly process data fields containing a
two-digit year is commonly referred to as the Year 2000 issue. Such systems may
be unable to accurately process certain date-based information. To mitigate any
adverse impact this may cause, the Companies have established a company wide
Year 2000 Project to address the issue of computer programs and embedded
computer chips which may be unable to correctly function with the Year 2000. In
addition, the Companies updated major elements of their information systems by
implementing programs purchased from Systems, Applications and Products in Data
Processing ("SAP"). The first phase of SAP implementation, which included the
financial reporting and materials management modules, was brought into
production on January 1, 1998. Additional SAP modules including plant
maintenance work order and cost tracking were implemented throughout 1998. The
light oils product scheduling, inventory and billing module and the human
resources module were brought into production on June 1 and July 1, 1999,
respectively. The total cost of the SAP implementation was approximately $125
million, which included software, hardware, reengineering and change management.
Management has determined that SAP is an appropriate solution to the Year 2000
issue related to the systems for which SAP was implemented. Such systems
comprise approximately 80 percent of CITGO's total information systems.
Remaining business software systems were made Year 2000 ready through the Year
2000 Project or they were replaced.

         The Companies did not experience any significant business disruptions
or malfunctions in their operating or business systems during the transition
from 1999 to 2000. Based on operations since January 1, 2000, the Companies do
not expect any significant impact to their ongoing business as a result of Year
2000 issues. It is possible, however, that the full impact of the date
transition has not been fully recognized. For example, it is possible that
date-related issues such as quarterly or year-end processing issues may occur.
The Companies believe that any such problems are likely to be minor and
correctable.

                                       26

<PAGE>


In addition, the Company could still be negatively affected if its customers or
suppliers are adversely affected by similar date-related issues. The Companies
are currently not aware of any significant Year 2000 or similar problems that
have arisen for their customers and suppliers.

         Excluding SAP implementation, the Companies expended $18 million on
Year 2000 readiness efforts through year-end 1999. These expenditures included
identifying and remediating potential Year 2000 problems, and the associated
program administration and labor costs incurred.

Item 7 A.  Quantitative and Qualitative Disclosures About Market Risk

         Introduction. The Companies have exposure to price fluctuations of
crude oil and refined products as well as fluctuations in interest rates. To
manage these exposures, management has defined certain benchmarks consistent
with its preferred risk profile for the environment in which the Companies
operate and finance their assets. The Companies do not attempt to manage the
price risk related to all of their inventories of crude oil and refined
products. As a result, at December 31, 1999, the Companies were exposed to the
risk of broad market price declines with respect to a substantial portion of
their crude oil and refined product inventories. The following disclosures do
not attempt to quantify the price risk associated with such commodity
inventories.

         Commodity Instruments. CITGO balances its crude oil and petroleum
product supply / demand and manages a portion of its price risk by entering into
petroleum commodity derivatives. Generally, CITGO's risk management strategies
qualify as hedges, however, certain strategies that CITGO may use on commodity
positions do not qualify as hedges.

                        Non Trading Commodity Derivatives
                       Open Positions at December 31, 1999

<TABLE>
<CAPTION>
                                                     Maturity          Number of       Contract           Market
       Commodity                Derivative             Date            Contracts          Value(2)           Value
       ---------                ----------             ----            ---------          --------           -----
                                                                                              ($ in millions)
                                                                                      ---------------------------------

<S>                       <C>                          <C>                <C>         <C>                <C>
No Lead Gasoline(1)       Futures Purchased            2000               60          $       1.7        $     1.7
                          Futures Sold                 2000               225         $       6.1        $     6.4
                          Swaps                        2000               300         $       8.1        $     7.8

Heating Oil(1)            Futures Purchased            2000               217         $       5.7        $     6.0
                          Futures Purchased            2001                6          $       0.1        $     0.1
                          Futures Sold                 2000               450         $      12.5        $    12.8
                          Swaps                        2000               336         $       7.7        $     7.7

Crude Oil(1)              Swaps                        2000               600         $      13.4        $    14.3

Natural Gas(3)            Futures Purchased            2000                6          $       0.1        $     0.1

------------------
<FN>
(1)      1,000 barrels per contract
(2)      Weighted average price
(3)      10,000 mmbtu per contract
</FN>
</TABLE>



                                       27

<PAGE>


                        Non Trading Commodity Derivatives
                       Open Positions at December 31, 1999
<TABLE>
<CAPTION>
                                                     Maturity          Number of       Contract           Market
       Commodity                Derivative             Date            Contracts          Value(2)           Value
       ---------                ----------             ----            ---------          --------           -----
                                                                                              ($ in millions)
                                                                                      ---------------------------------

<S>                       <C>                          <C>                <C>         <C>                <C>
No Lead Gasoline(1)       Futures Purchased            1999               500         $       8.0        $     8.0

Heating Oil(1)            Futures Purchased            1999               371         $       7.0        $     6.0
                          Futures Sold                 1999               110         $       2.0        $     2.0

------------------
<FN>
(1)      1,000 barrels per contract
(2)      Weighted average price
</FN>
</TABLE>

         Debt Related Instruments. CITGO has fixed and floating U.S. currency
denominated debt. CITGO uses interest rate swaps to manage its debt portfolio
toward a benchmark of 40 to 60 percent fixed rate debt to total fixed and
floating rate debt. These instruments have the effect of changing the interest
rate with the objective of minimizing CITGO's long-term costs. At December 31,
1999, CITGO's primary exposures were to U.S. dollar, LIBOR and U.S. Treasury
rates.

         For interest rate swaps, the table below presents notional amounts and
interest rates by expected (contractual) maturity dates. Notional amounts are
used to calculate the contractual payments to be exchanged under the contracts.

                      Non Trading Interest Rate Derivatives
                  Open Positions at December 31, 1999 and 1998

<TABLE>
<CAPTION>
                                                                                       National
                                                                        Fixed         Principal
                Variable Rate Index          Expiration Date          Rate Paid         Amount
                -------------------          ---------------          ---------         ------
                                                                                    ($ in millions)

             <S>                         <C>                            <C>         <C>
             One-month LIBOR             May 2000                       6.28%       $     25
             J.J. Kenny                  May 2000                       4.72%             25
             J.J. Kenny                  February 2005                  5.30%             12
             J.J. Kenny                  February 2005                  5.27%             15
             J.J. Kenny                  February 2005                  5.49%             15
                                                                                    ---------------
                                                                                    $     92
                                                                                    ===============
</TABLE>


         The fair value of the interest rate swap agreements in place at
December 31, 1999, based on the estimated amount that CITGO would receive or pay
to terminate the agreements as of that date and taking into account current
interest rates, was an unrealized loss of $1.3 million.

         For debt obligations, the table below presents principal cash flows and
related weighted average interest rates by expected maturity dates. Weighted
average variable rates are based on implied forward rates in the yield curve at
the reporting date.



                                       28

<PAGE>


                                Debt Obligations
                              At December 31, 1999

<TABLE>
<CAPTION>
                                                                                                      Expected
        Expected                  Fixed              Average Fixed             Variable           Average Variable
       Maturities               Rate Debt            Interest Rate             Rate Debt            Interest Rate
       ----------               ---------            -------------             ---------            -------------
                             ($ in millions)                                ($ in millions)

       <S>                     <C>                         <C>                <C>                        <C>
          2000                 $   290                     7.94%              $    40                    5.72%
          2001                      40                     9.11%                   32                    6.11%
          2002                      36                     8.78%                   75                    6.22%
          2003                     560                     7.98%                  345                    6.25%
          2004                      31                     8.02                    16                    6.29%
       Thereafter                  391                     8.02%                  484                    6.41%
                               ------------           ------------            ------------           ---------
         Total                 $ 1,348                     8.04%              $   992                    6.30%
                               ============           ============            ============           =========
       Fair Value              $ 1,288                                        $   992
                               ============                                   =======
</TABLE>


                                Debt Obligations
                              At December 31, 1998

<TABLE>
<CAPTION>
                                                                                                      Expected
        Expected                  Fixed              Average Fixed             Variable           Average Variable
       Maturities               Rate Debt            Interest Rate             Rate Debt            Interest Rate
       ----------               ---------            -------------             ---------            -------------
                             ($ in millions)                                ($ in millions)

      <S>                      <C>                         <C>                <C>                        <C>
      1999                     $    40                     9.11%              $    44                    5.01%
      2000                         290                     7.94%                    7                    5.09%
      2001                          40                     9.11%                    7                    5.23%
      2002                          36                     8.78%                   45                    5.31%
      2003                         559                     7.98%                  165                    5.44%
      Thereafter                   422                     8.02%                  501                    6.00%
                               ------------           ------------            ------------           ---------
      Total                    $ 1,387                     8.07%              $   769                    5.77%
                               ============           ============            ============           =========
      Fair Value               $ 1,356                                        $   769
                               ============                                   =======
</TABLE>








                                       29


<PAGE>


ITEM 8.  Financial Statements and Supplementary Data

         The Consolidated Financial Statements, the Notes to Consolidated
Financial Statements and the Independent Auditors' Report are included in Item
14a of this report. The Quarterly results of Operations are reported in Note 16
of the Notes to Consolidated Financial Statements included in Item 14a.

ITEM 9.  Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure

         None.


















                                       30

<PAGE>


                                    PART III

ITEM 10.  Directors And Executive Officers Of The Registrant

         The directors and executive officers of PDV America are as follows:

Name                      Age         Position
----                      ---         --------

Luis Centeno              50          Chairman of the Board and Director,
                                      President, Chief Executive and Financial
                                      Officer

Jose I. Moreno            41          Secretary and Director

Jose Sifontes             45          Treasurer and Chief Accounting Officer

         Directors are elected to serve until their successors are duly elected
and qualified. Executive officers are appointed by and serve at the discretion
of the Board of Directors.

         Luis Centeno has been a director of PDV America and Chairman of the
Board, President, Chief Executive and Financial Officer, since November 1999.
Currently, he is the Corporate Finance Coordinator of PDVSA.

         Jose I. Moreno has been a director of PDV America and Secretary since
August 1998. He has served as legal counsel to various subsidiaries of PDVSA in
Venezuela and as member of the Board of Directors in subsidiaries of PVDSA
located outside Venezuela, since 1991.

         Jose Sifontes has been Treasurer and Chief Accounting Officer of PDV
America since November 1999. He has been the Corporate Finance Functional
Manager of PDVSA since September 1999.

         PDV America's Board of Directors currently has no committees.

ITEM 11.  Executive Compensation

         For the year ended December 31, 1999, the directors and executive
officers of PDV America received compensation in the aggregate of approximately
$1,200,000.

ITEM 12.  Security Ownership of Certain Beneficial Owners and Management

         Not applicable.

ITEM 13.  Certain Relationships and Related Transactions

         PDV America is a wholly-owned, indirect subsidiary of PDVSA. As a
result, PDVSA, either directly or indirectly, nominates and selects members of
the Board of Directors of PDV America and its subsidiaries. Certain members of
the Board of Directors of PDV America are also directors and executive officers
of PDVSA.

         CITGO has entered into several transactions with PDVSA or other
affiliates of PDVSA, including crude oil and feedstock supply agreements,
agreements for the purchase of refined products and transportation agreements.
Under these agreements, CITGO purchased approximately $1.7 billion of

                                       31

<PAGE>


crude oil, feedstocks and refined products at market related prices from PDVSA
in 1999. At December 31, 1999, $178 million was included in CITGO's current
payable to affiliates as a result of its transactions with PDVSA. (See "Items 1.
and 2. Business and Properties -- Crude Oil and Refined Product Purchases").

         LYONDELL-CITGO owns and operates a 265 MBPD refinery in Houston, Texas.
LYONDELL-CITGO was formed in 1993 by subsidiaries of CITGO and Lyondell,
referred to as the owners. CITGO contributed cash during the years 1993 through
1997 for a participation interest and other commitments related to
LYONDELL-CITGO's refinery enhancement project, and Lyondell contributed the
Houston refinery and related assets for the remaining participation interest.
The refinery enhancement project to increase the refinery's heavy crude oil high
conversion capacity was substantially completed at the end of 1996 with an
in-service date of March 1, 1997. The heavy crude oil processed by the Houston
refinery is supplied by PDVSA under a long-term crude oil supply agreement
through the year 2017. Under this agreements, LYONDELL-CITGO purchased
approximately $1 billion of crude oil, feedstocks at market related prices from
PDVSA in 1999. CITGO purchases substantially all of the gasoline, diesel and jet
fuel produced at the Houston refinery under a long-term contract. (See
Consolidated Financial Statements of PDV America -- Notes 3 and 4 in Item 14a).

         CITGO's participation interest in LYONDELL-CITGO was approximately 41%
at December 31, 1999, in accordance with agreements between the owners
concerning such interest. CITGO has a one-time option exercisable after January
1, 2000 but before September 30, 2000, to increase, for an additional
investment, its participation interest to 50%.

         CITGO loaned $25 million and $20 million to LYONDELL-CITGO during 1999
and 1998, respectively. The notes bear interest at market rates which were
approximately 6.7% at December 31, 1999 and 1998, and are due July 1, 2003.
Effective December 31, 1999, CITGO converted $33 million of these notes to
investments in LYONDELL-CITGO.

         LYONDELL-CITGO has a $450 million credit facility that is due on May 5,
2000. The Owners are currently reviewing financing alternatives to address this
situation. However, there is no agreement on a definitive plan to replace this
facility and LYONDELL-CITGO does not have the funds available to repay the
facility when it becomes due. As a result of this circumstance, CITGO management
conducted a review to determine if its ability to realize the carrying value of
its investment in LYONDELL-CITGO has been impaired. Based upon this review, PDV
America's management has determined that no such impairment has occurred.

         CITGO accounts for its investment in LYONDELL-CITGO using the equity
method of accounting and records its share of the net earnings of LYONDELL-CITGO
based on allocations of income agreed to by the owners.

         On May 1, 1997, PDV America and Union Oil Company of California closed
a transaction relating to The UNO-VEN Company. The transaction transferred
certain assets and liabilities to PDVMR, a subsidiary of PDV America, in
liquidation of PDV America's 50% ownership interest in UNO-VEN. The assets
include a refinery in Lemont, Illinois, as well as product distribution
terminals located in the Midwest. CITGO operates these facilities and purchases
the products produced at the refinery (See Consolidated Financial Statements of
PDV America -- Note 3 in Item 14a). A portion of the crude oil processed by
PDVMR is supplied by PDVSA under a long-term crude supply contract.

         An affiliate of PDVSA acquired a 50% equity interest in Chalmette in
October 1997 and has assigned to CITGO its option to purchase up to 50% of the
refined products produced at the refinery through December 31, 2000 (See
Consolidated Financial Statements of PDV America -- Note 3 in Item

                                       32

<PAGE>


14a). CITGO acquired approximately 66 MBPD of refined products from the refinery
during 1999, approximately one-half of which was gasoline.

         In October 1998 an affiliate of PDVSA acquired a 50% equity interest in
HOVENSA and has the right under a product sales agreement to assign periodically
to CITGO, or other related parties, its option to purchase 50% of the refined
products produced by HOVENSA (less a certain portion of such products that
HOVENSA will market directly in the local and Caribbean markets). In addition,
under the product sales agreement, the PDVSA affiliate has appointed CITGO as
its agent in designating which of its affiliates shall from time to time take
deliveries of the refined products available to it. The product sales agreement
will be in effect for the life of the joint venture, subject to termination
events based on default or mutual agreement (See Consolidated Financial
Statements of PDV America -- Note 2 in Item 14a). Pursuant to the above
arrangement, CITGO acquired approximately 118 MBPD of refined products from the
refinery during 1999, approximately one-half of which was gasoline.

         The purchase agreements with LYONDELL-CITGO, PDVMR, Chalmette and
HOVENSA incorporate various formula prices based on published market prices and
other factors. Such purchases totaled $4.3 and $2.9 billion for 1999 and 1998,
respectively. At December 31, 1999 and 1998, $196 and $64 million, respectively,
were included in payables to affiliates as a result of these transactions.

         CITGO had refined product, feedstock, crude oil and other product sales
of $190 and $164 million to affiliates, including LYONDELL-CITGO and MVPPP, in
1999 and 1998, respectively. At December 31, 1999 and 1998, $38 million and $34
million, respectively, were included in Due from affiliates as a result of these
transactions.

         CITGO has guaranteed approximately $101 million of debt of certain
affiliates, including $50 million related to HOVENSA and $11 million related to
Nelson Industrial Steam Company. (See Consolidated Financial Statements of PDV
America -- Note 13 in Item 14a.)

         PDVMR is party to a Contract for Purchase and Sale of Crude Oil dated
April 23, 1997, with Maraven S.A. ("Maraven"), a corporation organized and
existing, at the date of the contract, under the laws of the Bolivarian Republic
of Venezuela, and CITGO. In accordance with the contract, Maraven (or its
successor) is obligated to provide a base volume of up to 100,000 barrels per
day of Venezuelan crude, and CITGO as operator is responsible for administering
the purchase of additional volumes of crude for the refinery. The Venezuelan
crude is priced in accordance with a formula based upon posted crude prices less
a quality differential. Maraven (or its successor), CITGO and PDVMR can change
the amount and type of crude supplied in order to capture additional economic
opportunities. The term of the agreement is 60 months with renewal periods of 12
months.

         PDVMR sells certain refinery by-products and utilities to The Needle
Coker Company ("Needle") and buys back hydrogen, naphtha and steam. Sales to
Needle were approximately $9 million and $13 million in 1999 and 1998,
respectively. Purchases from Needle were approximately $6 million and $13
million in 1999 and 1998, respectively.

         During 1995, the Company entered into a service agreement with PDVSA to
provide financial and foreign agency services. Income from these services was
approximately $1 million, $2 million and $1 million in 1999, 1998 and 1997,
respectively.

         Under a separate guarantee of rent agreement, PDVSA has guaranteed
payment of rent, stipulated loss value and terminating value due under the lease
of the Corpus Christi Refinery West Plant (See Consolidated Financial Statements
of PDV America -- Note 14 in Item 14a).


                                       33

<PAGE>


         The notes receivable from PDVSA are unsecured and are comprised of $250
million of 7.75% notes maturing on August 1, 2000 and $500 million of 7.995%
notes maturing on August 1, 2003. Interest on these notes is payable
semiannually by PDVSA to the Company on February 1 and August 1 of each year,
less one business day. Interest income attributable to such notes was
approximately $59 million, $70 million and $78 million for years ended December
31, 1999, 1998 and 1997, respectively, with approximately $25 million included
in due from affiliates at December 31, 1999 and 1998. The notes receivable from
affiliate are unsecured and are comprised of two $130 million of 8.558% notes
maturing on November 10, 2013 and a $38 million 10.395% note maturing May 15,
2014. Interest on these notes is payable quarterly. Interest income attributable
to such notes was approximately $24 million and $3 million at December 31, 1999
and 1998, respectively, with approximately $4 million and $3 million included in
due from affiliates at December 31, 1999 and 1998, respectively. Due to the
related party nature of these notes receivable, it is not practicable to
estimate their fair value.

         CITGO and PDV America are parties to a tax allocation agreement that is
designed to provide PDV America with sufficient cash to pay its consolidated
income tax liabilities.


















                                       34

<PAGE>


                                     PART IV

ITEM 14.  Exhibits, Financial Statements and Reports on Form 8-K

a.  Certain Documents Filed as Part of this Report

    (1) Financial Statements:
                                                                            Page

Independent Auditors' Report                                                 F-1

Consolidated Balance Sheets at December 31, 1999 and 1998                    F-2

Consolidated Statements of Income and Comprehensive Income for each of
   the years ended December 31, 1999, 1998 and 1997                          F-3

Consolidated Statements of Shareholder's Equity for each of
   the years ended December 31, 1999, 1998 and 1997                          F-4

Consolidated Statements of Cash Flows for each of
   the years ended December 31, 1999, 1998 and 1997                          F-5

Notes to Consolidated Financial Statements                                   F-7

    (2)  Exhibits:

    The Exhibit Index in part c. below lists the exhibits that are filed as part
    of, or incorporated by reference into, this report.

b.  Reports on Form 8-K

    None.


                                       35
<PAGE>


c.  Exhibits

Exhibit
Number                          Description
-------                         -----------

   *3.1       Certificate of Incorporation, Certificate of Amendment of
              Certificate of Incorporation and By-laws of PDV America

   *4.1       Indenture, dated as of August 1, 1993, among PDV America,
              Propernyn, PDVSA and Citibank, N.A., as trustee, relating to PDV
              America's 7-1/4% Senior Notes Due 1998, 7-3/4% Senior Notes Due
              2000 and 7-7/8% Senior Notes Due 2003

   *4.2       Form of Senior Note (included in Exhibit 4.1)

  *10.1       Crude Supply Agreement, dated as of September 30, 1986, between
              CITGO Petroleum Corporation and Petroleos de Venezuela, S.A.

  *10.2       Supplemental Crude Supply Agreement, dated as of September 30,
              1986, between CITGO Petroleum Corporation and Petroleos de
              Venezuela, S.A.

  *10.3       Crude Oil and Feedstock Supply Agreement, dated as of March 31,
              1987, between Champlin Refining Company and Petroleos de
              Venezuela, S.A.

  *10.4       Supplemental Crude Oil and Feedstock Supply Agreement, dated as of
              March 31, 1987, between Champlin Refining Company and Petroleos de
              Venezuela, S.A.

  *10.5       Contract for the Purchase/Sale of Boscan Crude Oil, dated as of
              June 2, 1994, between Tradecal, S.A. and CITGO Asphalt Refining
              Company

  *10.6       Restated Contract for the Purchase/Sale of Heavy/Extra Heavy Crude
              Oil, dated December 28, 1990, among Maraven, S.A., Lagoven, S.A.,
              and Seaview Oil Company

  *10.7       Sublease Agreement, dated as of March 31, 1987, between Champlin
              Petroleum Company, as Sublessor, and Champlin Refining Company, as
              Sublessee

  *10.8       Operating Agreement, dated as of May 1, 1984, among Cit-Con Oil
              Corporation, CITGO Petroleum Corporation and Conoco, Inc.

  *10.9       Amended and Restated Limited Liability Company Regulations of
              LYONDELL-CITGO Refining Company, Ltd. dated July 1, 1993

  *10.10      Contribution Agreement among Lyondell Petrochemical Company,
              LYONDELL-CITGO Refining Company, Ltd. and Petroleos de Venezuela,
              S.A.

--------------------
*    Previously filed in connection with the Registrant's Registration Statement
     on Form F-1, Registration No. 33-63742, originally filed with the
     Commission on June 2, 1993.


                                       36
<PAGE>


  *10.11      Crude Oil Supply Agreement, dated as of May 5, 1993, between
              LYONDELL-CITGO Refining Company, Ltd. and Lagoven, S.A.

  *10.12      Supplemental Supply Agreement, dated as of May 5, 1993, between
              LYONDELL-CITGO Refining Company, Ltd. and Petroleos de Venezuela,
              S.A.

  *10.13      The UNO-VEN Company Partnership Agreement, dated as of December 4,
              1989, between Midwest 76, Inc. and VPHI Midwest, Inc.

  *10.14      Supply Agreement, dated as of December 1, 1989, between The
              UNO-VEN Company and Petroleos de Venezuela, S.A.

  *10.15      Supplemental Supply Agreement, dated as of December 1, 1989,
              between The UNO-VEN Company and Petroleos de Venezuela, S.A.

  *10.16      Tax Allocation Agreement, dated as of June 24, 1993, among PDV
              America, Inc., VPHI Midwest, Inc., CITGO Petroleum Corporation and
              PDV USA, Inc., as amended

 **10.17      Amendment and Supplement to Supply Agreement, dated as of May 11,
              1994, between The UNO-VEN Company and Tradecal, S.A., as assignee
              of Petroleos de Venezuela, S.A.

***10.18      $150,000,000 Credit Agreement, dated May 13, 1998 between CITGO
              Petroleum Corporation and the Bank of America National Trust and
              Savings Association, The Bank of New York, the Royal Bank of
              Canada and Other Financial Institutions

***10.19      $400,000,000 Credit Agreement, dated May 13, 1998 between CITGO
              Petroleum Corporation and the Bank of America National Trust and
              Savings Association, The Bank of New York, the Royal Bank of
              Canada and Other Financial Institutions

***10.20      Limited Partnership Agreement of LYONDELL-CITGO Refining LP, dated
              December 31, 1998

-----------------------
*    Previously filed in connection with the Registrant's Registration Statement
     on Form F-1, Registration No. 33-63742, originally filed with the
     Commission on June 2, 1993.

**   Previously filed in connection with the Registrant's Annual Report on Form
     10-K for the fiscal year ended December 31, 1994.

***  Previously filed as an Exhibit to CITGO Petroleum Corporation's ("CITGO")
     Form 10-K (File No. 1-14380) and incorporated herein by this reference.


                                       37
<PAGE>


***10.21      Loan agreement with PDVSA Finance Ltd. consisting of a Promissory
              Note in the amount of $130,000,000, dated November 10, 1998

***10.22      Loan agreement with PDVSA Finance Ltd. consisting of a Promissory
              Note in the amount of $130,000,000, dated November 10, 1998

   10.23      Loan agreement with PDVSA Finance Ltd. consisting of a Promissory
              Note in the amount of $38,000,000, dated July 2, 1999

   12.1       Computation of Ratio of Earnings to Fixed Charges

   21.1       List of Subsidiaries of the Registrant

   27.1       Financial Data Schedule

-----------------------
*    Previously filed in connection with the Registrant's Registration Statement
     on Form F-1, Registration No. 33-63742, originally filed with the
     Commission on June 2, 1993.

**   Previously filed in connection with the Registrant's Annual Report on Form
     10-K for the fiscal year ended December 31, 1994.

***  Previously filed as an Exhibit to PDV America's Form 10-K for the fiscal
     year ended December 31, 1998.



                                       38
<PAGE>


                                   SIGNATURES

         Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized, on March 30, 2000.

                                             PDV AMERICA, INC.

                                             By     /s/ Luis Centeno
                                               ---------------------------------
                                                        Luis Centeno
                                             President, Chief Executive and
                                               Financial Officer, Director

         Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant in the capacities and on the dates indicated.

         Signatures                        Title                  Date
         ----------                        -----                  ----

By    /s/ Luis Centeno            President, Chief Executive      March 30, 2000
  ----------------------------      and Financial Officer,
          Luis Centeno              Director


By    /s/ Jose I. Moreno          Secretary, Director             March 30, 2000
  ----------------------------
          Jose I. Moreno

By    /s/ Jose Sifontes           Treasurer, Chief Accounting     March 30, 2000
  ----------------------------      Officer
          Jose Sifontes


                                       39
<PAGE>


INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Shareholder of
PDV America, Inc.

We have audited the accompanying consolidated balance sheets of PDV America,
Inc. and subsidiaries (the "Company") as of December 31, 1999 and 1998, and the
related consolidated statements of income and comprehensive income,
shareholder's equity and cash flows for each of the three years in the period
ended December 31, 1999. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of PDV America, Inc. and subsidiaries
at December 31, 1999 and 1998, and the results of their operations and their
cash flows for each of the three years in the period ended December 31, 1999 in
conformity with generally accepted accounting principles.

Deloitte & Touche LLP

New York, New York

February 11, 2000




                                      F-1
<PAGE>




<TABLE>
<CAPTION>
PDV AMERICA, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1999 AND 1998
(Dollars in Thousands)
----------------------------------------------------------------------------------------

ASSETS                                                       1999              1998
<S>                                                       <C>               <C>
CURRENT ASSETS:
  Cash and cash equivalents                               $   113,414       $     34,822
  Accounts receivable - net                                 1,027,352            592,315
  Due from affiliates                                          42,340             52,666
  Inventories                                               1,097,923            835,128
  Current portion of notes receivable from PDVSA              250,000                 -
  Prepaid expenses and other                                   16,949             85,571
                                                          -----------       ------------
       Total current assets                                 2,547,978          1,600,502

NOTES RECEIVABLE FROM PDVSA AND AFFILIATE                     798,000          1,010,000
PROPERTY, PLANT AND EQUIPMENT - Net                         3,417,815          3,420,053
RESTRICTED CASH                                                 3,015              9,436
INVESTMENTS IN AFFILIATES                                     758,812            807,659
OTHER ASSETS                                                  219,946            227,760
                                                          -----------       ------------
        TOTAL                                             $ 7,745,566       $  7,075,410
                                                          ===========       ============

LIABILITIES AND SHAREHOLDER'S EQUITY

CURRENT LIABILITIES:
  Short-term bank loans                                   $    16,000       $     37,000
  Accounts payable                                            780,660            492,090
  Due to affiliates                                           281,428            158,956
  Taxes other than income                                     218,503            219,642
  Other current liabilities                                   208,394            247,966
  Income taxes payable                                          6,367              1,607
  Current portion of deferred income taxes                      9,716                  -
  Current portion of long-term debt                           314,078             47,078
  Current portion of capital lease obligation                  16,356             14,660
                                                          -----------       ------------
  Total current liabilities                                 1,851,502          1,218,999

LONG-TERM DEBT                                              2,010,223          2,071,843
CAPITAL LEASE OBLIGATION                                       85,570            101,926
POSTRETIREMENT BENEFITS OTHER THAN PENSIONS                   212,871            200,281
OTHER NONCURRENT LIABILITIES                                  230,189            230,007
DEFERRED INCOME TAXES                                         607,213            621,463
MINORITY INTEREST                                              29,710             29,559
                                                          -----------       ------------
COMMITMENTS AND CONTINGENCIES (Note 13)

SHAREHOLDER'S EQUITY:
  Common stock, $1.00 par value - authorized,
    issued and outstanding, 1,000 shares                            1                  1
  Additional capital                                        1,532,435          1,532,435
  Retained earnings                                         1,189,066          1,068,896
  Accumulated other comprehensive income                       (3,214)                 -
                                                         ------------       ------------
 Total shareholder's equity                                 2,718,288          2,601,332
                                                         ------------       ------------
TOTAL                                                    $  7,745,566       $  7,075,410
                                                         ============       ============
See notes to consolidated financial statements.
</TABLE>


                                      F-2
<PAGE>



<TABLE>
<CAPTION>
PDV AMERICA, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME AND
COMPREHENSIVE INCOME
THREE YEARS ENDED DECEMBER 31, 1999
(Dollars in Thousands)
---------------------------------------------------------------------------------------------------------------------------


                                                                         1999               1998               1997
<S>                                                                  <C>               <C>                 <C>
REVENUES:
  Net sales                                                          $13,135,695       $ 10,780,691        $13,394,608
Sales to affiliates                                                      196,137            179,556            227,595
                                                                     -----------       ------------        -----------

                                                                      13,331,832         10,960,247         13,622,203

Equity in earnings (losses) of affiliates                                 22,161             82,338             68,930
Interest income from PDVSA                                                83,645             73,152             77,725
Other income (expense) - net                                             (27,350)            (8,669)           (14,487)
                                                                     -----------       ------------        -----------

                                                                      13,410,288         11,107,068         13,754,371
                                                                     -----------       ------------        -----------
COST OF SALES AND EXPENSES:
  Cost of sales and operating expenses (including
    purchases of $5,002,127, $3,576,056, and $4,275,607
    from affiliates)                                                  12,807,227         10,305,535         12,997,592
  Selling, general and administrative expenses                           237,144            258,366            211,423
  Interest expense:
    Capital leases                                                        12,715             14,235             15,597
    Other                                                                152,636            166,006            193,868
  Minority interest                                                          151              1,223              1,706
                                                                     -----------       ------------        -----------

                                                                      13,209,873         10,745,365         13,420,186
                                                                     -----------       ------------        -----------

INCOME BEFORE INCOME TAXES                                               200,415            361,703            334,185

INCOME TAXES                                                              58,230            130,985            106,168
                                                                     -----------       ------------        -----------

NET INCOME                                                               142,185            230,718            228,017

OTHER COMPREHENSIVE INCOME -
  Minimum pension liability adjustment, net of
    deferred tax benefit of $2,012                                        (3,214)                 -                  -
                                                                     -----------       ------------        -----------

COMPREHENSIVE INCOME                                                 $   138,971       $    230,718        $   228,017
                                                                     ===========       ============        ===========


See notes to consolidated financial statements.
</TABLE>


                                      F-3
<PAGE>


<TABLE>
<CAPTION>
PDV AMERICA, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDER'S EQUITY
THREE YEARS ENDED DECEMBER 31, 1999
(Dollars in Thousands)
------------------------------------------------------------------------------------------------------------------------------------

                                                                                                  Accumulated
                                                                                                    Other             Total
                                              Common Stock        Additional     Retained        Comprehensive    Shareholder's
                                            Shares    Amount       Capital       Earnings           Income            Equity
<S>                                         <C>       <C>         <C>           <C>              <C>              <C>
BALANCE, JANUARY 1, 1997                         1    $    1      $1,232,435    $  878,639       $      -         $ 2,111,075

  Capital contributions received from
    parent                                       -         -         250,000             -              -             250,000

  Net income                                     -         -               -       228,017              -             228,017
                                            ------    ------       ---------    ----------       --------         -----------

BALANCE, DECEMBER 31, 1997                       1         1       1,482,435     1,106,656              -           2,589,092

  Capital contributions received from            -         -          50,000             -              -              50,000
    parent

  Dividend distribution                          -         -               -      (268,478)             -            (268,478)

  Net income                                     -         -               -       230,718              -             230,718
                                            ------    ------       ---------    ----------       --------         -----------

BALANCE, DECEMBER 31, 1998                       1         1       1,532,435     1,068,896              -           2,601,332

  Other comprehensive income:
    Minimum pension liability adjustment         -         -               -             -         (3,214)             (3,214)

  Net income                                     -         -               -       142,185              -             142,185

  Dividend paid                                  -         -               -       (22,015)             -             (22,015)
                                            ------    ------       ---------    ----------       --------         -----------

BALANCE, DECEMBER 31, 1999                       1     $   1      $1,532,435    $1,189,066       $ (3,214)        $ 2,718,288
                                            ======     =====      ==========    ==========       ========         ===========

See notes to consolidated financial statements.
</TABLE>


                                      F-4
<PAGE>


<TABLE>
<CAPTION>
PDV AMERICA, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE YEARS ENDED DECEMBER 31, 1999
(Dollars in Thousands)
------------------------------------------------------------------------------------------------------------------------


                                                                           1999             1998             1997
<S>                                                                     <C>              <C>              <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income                                                            $   142,185      $   230,718      $   228,017
  Adjustments to reconcile net income to net cash
    provided by operating activities:
    Depreciation and amortization                                           276,916          265,125          240,523
    Provision for losses on accounts receivable                              15,110           13,826           17,827
    Loss (gain) on sale of investments                                        1,616           (2,590)               -
    Deferred income taxes                                                    73,466           72,593           82,145
    Distributions in excess of equity in
     earnings of affiliates                                                  82,847           46,180           33,506
    Inventory adjustment to market                                                -          171,600                -
    Postretirement benefits                                                       -              516          (10,605)
    Other adjustments                                                        18,162             (259)           7,397
    Change in operating assets and liabilities, exclusive of
     acquisitions of businesses:
     Accounts receivable and due from affiliates                           (456,734)          85,930          325,358
     Inventories                                                           (262,795)          (6,456)         (95,107)
     Prepaid expenses and other current assets                                4,688           (9,687)           6,380
     Accounts payable and other                                             406,325         (113,088)        (320,263)
     Income taxes payable                                                     4,760           (9,867)         (15,934)
     Other assets                                                           (66,324)         (79,118)         (86,934)
     Other liabilities                                                      (15,523)          45,236           34,417
                                                                        -----------      -----------      -----------

        Net cash provided by operating activities                           224,699          710,659          446,727
                                                                        -----------      -----------      -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Capital expenditures                                                     (248,042)        (230,195)        (264,377)
  Proceeds from sales of property, plant and equipment                       16,495           26,722           28,194
  Loan to affiliate                                                         (38,000)        (260,000)               -
  Proceeds from notes receivable from PDVSA                                       -          250,000                -
  Decrease (increase) in restricted cash                                      6,421           (2,516)           2,449
  Investments in LYONDELL-CITGO
   Refining LP                                                                    -                -          (45,635)
  Loans to LYONDELL-CITGO
   Refining LP                                                              (24,600)         (19,800)         (16,509)
  Proceeds from sale of investments                                           4,980            7,160                -
  Investments in and advances to other affiliates                            (4,212)          (3,247)          (2,442)
                                                                        -----------     ------------     ------------

        Net cash used in investing activities                              (286,958)        (231,876)        (298,320)
                                                                        -----------     ------------     ------------

                                                                                                       (Continued)
</TABLE>



                                      F-5

<PAGE>


<TABLE>
<CAPTION>
PDV AMERICA, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE YEARS ENDED DECEMBER 31, 1999
(Dollars in Thousands)
--------------------------------------------------------------------------------------------------------------------------


                                                                             1999             1998             1997
<S>                                                                        <C>              <C>              <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
 Net proceeds from (repayments of) revolving bank loans                    $   252,000      $   (47,000)     $  (106,000)
 Net (repayments of) proceeds from short-term bank loans                       (21,000)          34,000          (50,000)
 Payments on term bank loan                                                          -          (58,823)         (29,412)
 Payments on private placement senior notes                                    (39,935)        (308,686)         (58,685)
 Payments on UHS business purchase liability                                    (6,427)          (7,191)               -
 (Payments on) proceeds from taxable bonds                                     (25,000)         100,000                -
 Proceeds from issuance of tax-exempt bonds                                     25,000           47,200                -
 Dividends paid to parent                                                      (22,015)        (268,478)               -
 Payments of capital lease obligations                                         (14,660)         (13,140)         (11,778)
 Repayments of other debt                                                       (7,112)          (7,111)          (5,109)
 Capital contributions received from parent                                          -           50,000          250,000
 Payment of UNO-VEN notes                                                            -                -         (135,000)
                                                                           -----------      -----------      ------------

        Net cash provided by (used in) financing activities                    140,851         (479,229)        (145,984)
                                                                           -----------      ------------     ------------

INCREASE (DECREASE) IN CASH AND
 CASH EQUIVALENTS                                                               78,592             (446)           2,423

CASH AND CASH EQUIVALENTS,
 BEGINNING OF YEAR                                                              34,822           35,268           32,845
                                                                           -----------      -----------      -----------

CASH AND CASH EQUIVALENTS, END OF YEAR                                     $   113,414      $    34,822      $    35,268
                                                                           ===========      ===========      ===========

SUPPLEMENTAL DISCLOSURES OF CASH FLOW
 INFORMATION:
 Cash paid during the year for:
  Interest (net of amount capitalized)                                     $   160,226      $   184,376      $   212,355
                                                                           ===========      ===========      ===========

  Income taxes (net of refunds)                                            $   (16,428)     $    60,392      $    48,639
                                                                           ===========      ===========      ===========

SUPPLEMENTAL SCHEDULE OF NONCASH
 INVESTING ACTIVITIES:
 Investment in LYONDELL-CITGO Refining LP
  (Note 2)                                                                 $   (32,654)     $         -      $         -
                                                                           ===========      ===========      ===========

See notes to consolidated financial statements.

                                                                                                         (Concluded)
</TABLE>


                                      F-6
<PAGE>



PDV AMERICA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
THREE YEARS ENDED DECEMBER 31, 1999
--------------------------------------------------------------------------------

1.    SIGNIFICANT ACCOUNTING POLICIES

      Basis of Presentation - PDV America, Inc. (the "Company") was incorporated
      on November 14, 1986 and is a wholly-owned subsidiary, effective April 21,
      1997, of PDV Holding, Inc. ("PDV Holding"), a Delaware corporation (see
      below). The Company's ultimate parent is Petroleos de Venezuela, S.A.
      ("PDVSA"), the national oil company of the Bolivarian Republic of
      Venezuela.

      On April 21, 1997, Propermyn B.V. ("Propermyn"), a Dutch limited liability
      company whose ultimate parent is PDVSA and which held all of the Company's
      common stock, contributed its shares of the Company to PDV Holding.

      Description of Business - The Companies (as defined below) manufacture or
      refine and market quality transportation fuels as well as lubricants,
      refined waxes, petrochemicals, asphalt and other industrial products.
      CITGO (as defined below) owns and operates two modern, highly complex
      crude oil refineries (Lake Charles, Louisiana, and Corpus Christi, Texas)
      and two asphalt refineries (Paulsboro, New Jersey, and Savannah, Georgia)
      with a combined aggregate rated crude oil refining capacity of 582
      thousand barrels per day ("MBPD"). CITGO also owns a minority interest in
      LYONDELL-CITGO Refining L.P., a limited partnership (formerly a limited
      liability company) that owns and operates a refinery in Houston, Texas,
      with a rated crude oil refining capacity of 265 MBPD. CITGO also operates
      a 167 MBPD refinery in Lemont, Illinois, owned by PDVMR (as defined
      below). CITGO's assets also include a 65% owned lubricant and wax plant,
      pipelines, and equity interests in pipeline companies and petroleum
      storage terminals. Transportation fuel customers include primarily CITGO
      branded wholesale marketers, convenience stores and airlines located
      primarily east of the Rocky Mountains. Asphalt is generally marketed to
      independent paving contractors on the east coast of the United States.
      Lubricants are sold to independent marketers, mass marketers and
      industrial customers. Petrochemical feedstocks and industrial products are
      sold to various manufacturers and industrial companies throughout the
      United States. Petroleum coke is sold primarily in international markets.

      Principles of Consolidation - The consolidated financial statements
      include the accounts of the Company, its wholly-owned subsidiaries
      including PDV USA, Inc., CITGO Petroleum Corporation ("CITGO") and its
      wholly-owned subsidiaries, Cit-Con Oil Corporation, which is 65% owned by
      CITGO and VPHI Midwest, Inc. ("Midwest") and its wholly-owned subsidiary,
      PDV Midwest Refining, L.L.C. ("PDVMR") (collectively, the "Companies").
      All material intercompany transactions and accounts have been eliminated.

      Prior to May 1, 1997, Midwest had a 50% interest in the UNO-VEN Company
      ("UNO-VEN"), an Illinois general partnership. Beginning May 1, 1997,
      pursuant to the Partnership Interest Retirement Agreement (Note 8), PDVMR
      now owns certain UNO-VEN assets, as defined. Accordingly, the consolidated
      financial statements reflect the equity in earnings of UNO-VEN through
      April 30, 1997 (see Note 8) and the results of operations of PDVMR on a
      consolidated basis since May 1, 1997.

      The Companies' investments in less than majority owned affiliates are
      accounted for by the equity method. The excess of the carrying value of
      the investments over the equity in the underlying net assets of the
      affiliates is amortized on a straight-line basis over 40 years, which is
      based upon the estimated useful lives of the affiliates' assets.


                                      F-7
<PAGE>


      Estimates, Risks and Uncertainties - The preparation of financial
      statements in conformity with generally accepted accounting principles
      requires management to make estimates and assumptions that affect the
      reported amounts of assets and liabilities and disclosure of contingent
      assets and liabilities at the date of the financial statements and the
      reported amounts of revenues and expenses during the reporting period.
      Actual results could differ from those estimates.

      The Companies' operations are sensitive to domestic and international
      political, legislative, regulatory and legal environments. In addition,
      significant changes in the prices or availability of crude oil and refined
      products could have a significant impact on the results of operations for
      any particular year.

      Impairment of Long-Lived Assets - The Companies periodically evaluate the
      carrying value of long-lived assets to be held and used when events and
      circumstances warrant such a review. The carrying value of a long-lived
      asset is considered impaired when the separately identifiable anticipated
      undiscounted net cash flow from such asset is less than its carrying
      value. In that event, a loss is recognized based on the amount by which
      the carrying value exceeds the fair value of the long-lived asset. Fair
      value is determined primarily using the anticipated net cash flows
      discounted at a rate commensurate with the risk involved. Losses on
      long-lived assets to be disposed of are determined in a similar manner,
      except that fair values are reduced for disposal costs.

      Revenue Recognition - Revenue is recognized upon transfer of title to
      products sold, based upon the terms of delivery.

      Supply and Marketing Activities - The Companies engage in the buying and
      selling of crude oil to supply their refineries. The net results of this
      activity are recorded in cost of sales. The Companies also engage in the
      buying and selling of refined products to facilitate the marketing of
      their refined products. The results of this activity are recorded in cost
      of sales and sales.

      Refined product exchange transactions that do not involve the payment or
      receipt of cash are not accounted for as purchases or sales. Any resulting
      volumetric exchange balances are accounted for as inventory in accordance
      with the Companies' last-in, first-out ("LIFO") inventory method.
      Exchanges that are settled through payment or receipt of cash are
      accounted for as purchases or sales.

      Excise Taxes - The Companies collect excise taxes on sales of gasoline and
      other motor fuels. Excise taxes of approximately $3.1 billion, $3.0
      billion and $3.2 billion were collected from customers and paid to various
      governmental entities in 1999, 1998 and 1997, respectively. Excise taxes
      are not included in sales.

      Cash and Cash Equivalents - Cash and cash equivalents consist of highly
      liquid short-term investments and bank deposits with initial maturities of
      three months or less.

      Restricted Cash - Restricted cash represents highly liquid, short-term
      investments held in trust accounts in accordance with a tax-exempt bond
      agreement. Funds are released solely for financing construction of
      environmental facilities as defined in the bond agreements.

      Inventories - Crude oil and refined product inventories are stated at the
      lower of cost or market and cost is determined using the LIFO inventory
      method. Materials and supplies are valued using the average cost method.

      Property, Plant and Equipment - Property, plant and equipment is reported
      at cost, less accumulated depreciation. Depreciation is based upon the
      estimated useful lives of the related assets using the straight-line
      method. Depreciable lives are generally as follows: buildings and
      leaseholds - 10 to 25 years; machinery and equipment - 3 to 25 years; and
      vehicles - 3 to 10 years.


                                      F-8
<PAGE>


      Upon disposal or retirement of property, plant and equipment, the cost and
      related accumulated depreciation are removed from the accounts and any
      resulting gain or loss is recognized in income.

      The Companies capitalize interest on projects when construction takes
      considerable time and entails major expenditures. Such interest is
      allocated to property, plant and equipment and amortized over the
      estimated useful lives of the related assets. Capitalized interest
      approximated $7 million, $5 million and $8 million in 1999, 1998 and 1997,
      respectively.

      Commodity and Interest Rate Derivatives - The Companies use commodity and
      financial instrument derivatives to manage defined interest rate and
      commodity price risks arising out of the Companies' core activities. The
      Companies have only limited involvement with other derivative financial
      instruments, and do not use them for trading purposes.

      The Companies enter into petroleum futures contracts, options and other
      over the counter commodity derivatives, primarily to hedge a portion of
      the price risk associated with crude oil and refined products. In order
      for a transaction to qualify for hedge accounting, the Companies require
      that the item to be hedged exposes the Companies to price risk and that
      the commodity contract reduces that risk and is designated as a hedge. The
      high correlation between price movements of a product and the commodity
      contract in that product is well demonstrated in the petroleum industry
      and, generally, the Companies rely on those historical relationships and
      on periodic comparisons of market price changes to price changes of
      futures and options contracts accounted for as hedges. Gains or losses on
      contracts which qualify as hedges are recognized when the related
      inventory is sold or the hedged transaction is consummated. Changes in the
      market value of commodity derivatives which are not hedges are recorded as
      gains or losses in the period in which they occur.

      The Companies also enter into various interest rate swap and cap
      agreements to manage their risk related to interest rate changes on their
      debt. Premiums paid for purchased interest rate swap and cap agreements
      are amortized to interest expense over the terms of the agreements.
      Unamortized premiums are included in other assets. The interest rate
      differentials received or paid by the Companies related to these
      agreements are recognized as adjustments to interest expense over the term
      of the agreements. Gains or losses on terminated swap agreements are
      either amortized over the original term of the swap agreement if the
      hedged borrowings remain in place or are recognized immediately if the
      hedged borrowings are no longer held.

      In June 1998, the Financial Accounting Standards Board issued Statement of
      Financial Accounting Standards ("SFAS") No. 133, Accounting for Derivative
      Instruments and Hedging Activities. The statement establishes accounting
      and reporting standards for derivative instruments and for hedging
      activities. It requires that an entity recognize all derivatives, at fair
      value, as either assets or liabilities in the statement of financial
      position with an offset either to shareholder's equity and comprehensive
      income or income depending upon the classification of the derivative. The
      Companies have not determined the impact on their financial statements
      that may result from adoption of SFAS No. 133, which is required no later
      than January 1, 2001.

      Refinery Maintenance - Costs of major refinery turnaround maintenance are
      charged to operations over the estimated period between turnarounds.
      Turnaround periods range approximately from one to eight years.
      Unamortized costs are included in other assets. Amortization of refinery
      turnaround costs is included in depreciation and amortization expense.
      Amortization was $58 million, $58 million and $57 million for 1999, 1998
      and 1997, respectively. Ordinary maintenance is expensed as incurred.

      The Securities and Exchange Commission is considering issuing a notice
      which will require companies to expense the non-capital portion of major
      maintenance costs as incurred. The notice will require that any existing
      unamortized non-capital maintenance costs be expensed immediately. The
      Company estimates that the pre-tax charge to income from this change will
      be approximately $107 million. It is


                                      F-9
<PAGE>


      likely that this change will be required by June 30, 2000 and will be
      reported as a cumulative effect of an accounting change in the
      consolidated statement of income.

      Environmental Expenditures - Environmental expenditures that relate to
      current or future revenues are expensed or capitalized as appropriate.
      Expenditures that relate to an existing condition caused by past
      operations and do not contribute to current or future revenue generation
      are expensed. Liabilities are recorded when environmental assessments
      and/or cleanups are probable, and the costs can be reasonably estimated.
      Environmental liabilities are not discounted to their present value.
      Subsequent adjustments to estimates, to the extent required, may be made
      as more refined information becomes available.

      Income Taxes - The Companies account for income taxes using an asset and
      liability approach, in accordance with Statement of Financial Accounting
      Standards ("SFAS") No. 109, Accounting for Income Taxes.

      Reclassifications - Certain reclassifications have been made to the 1997
      and 1998 financial statements to conform with the classifications used in
      1999.

2.    INVESTMENT IN LYONDELL-CITGO REFINING LP

      LYONDELL-CITGO Refining LP ("LYONDELL-CITGO") owns and operates a 265
      thousand barrel per day refinery in Houston, Texas. LYONDELL-CITGO was
      formed in 1993 by subsidiaries of CITGO and Lyondell Chemical Company
      ("Lyondell"), referred to as the Owners. CITGO contributed cash for a
      participation interest and other commitments related to LYONDELL-CITGO's
      refinery enhancement project, and Lyondell contributed the Houston
      refinery and related assets for the remaining participation interest. The
      refinery enhancement project to increase the refinery's heavy crude oil
      high conversion capacity was substantially completed at the end of 1996
      with an in-service date of March 1, 1997. The heavy crude oil processed by
      the Houston refinery is supplied by a subsidiary of PDVSA under a
      long-term crude oil supply contract that expires 2017. In April 1998, the
      crude oil supplier exercised its contractual rights and reduced deliveries
      of crude oil to LYONDELL-CITGO. LYONDELL-CITGO has been required to obtain
      alternative sources of crude oil supply in replacement which has resulted
      in lower operating margins. CITGO purchases substantially all of the
      refined products produced at the Houston refinery under a long-term
      contract (Note 3).

      CITGO's participation interest in LYONDELL-CITGO was approximately 41% at
      December 31, 1999. CITGO has a one-time option to increase, for an
      additional investment, its participation interest to 50%. This option may
      be exercised after January 1, 2000 but not later than September 30, 2000.

      CITGO loaned $24.6 million, $19.8 million and $16.5 million to
      LYONDELL-CITGO during 1999, 1998 and 1997, respectively. The notes bear
      interest at market rates which were approximately 6.7%, 5.9% and 5.9% at
      December 31, 1999, 1998 and 1997, and are due July 1, 2003. These notes
      are included in other assets in the accompanying consolidated balance
      sheets. Effective December 31, 1999, CITGO converted $32.7 million of
      these notes to investments in LYONDELL-CITGO.


                                      F-10
<PAGE>


      CITGO accounts for its investment in LYONDELL-CITGO using the equity
      method of accounting and records its share of the net earnings of
      LYONDELL-CITGO based on allocations of income agreed to by the Owners.
      Information on CITGO's investment in LYONDELL-CITGO follows:

<TABLE>
<CAPTION>
                                                                     December 31,
                                                -------------------------------------------------------
                                                     1999               1998              1997
                                                                    (000s Omitted)

      <S>                                         <C>                 <C>              <C>
      Carrying value of investment                $  560,227          $ 597,373        $  630,060
      Notes receivable                                28,255             36,309            16,509
      Participation interest                              41%                41%               42%
      Equity in net income                             $ 924            $58,827           $44,429
      Cash distributions received                     70,724             91,763            64,734

      Summary of financial position:
        Current assets                            $  219,000          $ 197,000        $  243,000
        Noncurrent assets                          1,406,000          1,440,000         1,438,000
        Current liabilities                          697,000            203,000           293,000
        Noncurrent liabilities                       316,000            785,000           715,000
        Member's equity                              612,000            649,000           673,000

      Summary of operating results:
        Revenue                                   $2,571,000         $2,055,000        $2,697,000
        Gross profit                                 133,000            291,000           255,000
        Net income                                    24,000            169,000           147,000
</TABLE>


      LYONDELL-CITGO has a $450 million credit facility that is due on May 5,
      2000. The Owners are currently reviewing financing alternatives to address
      this situation; however, there is no agreement on a definitive plan to
      replace this facility and LYONDELL-CITGO does not have the funds available
      to repay the facility when it becomes due. As a result of this
      circumstance, CITGO management conducted a review to determine if its
      ability to realize the carrying value of its investment in LYONDELL-CITGO
      has been impaired. Based upon this review, CITGO management has determined
      that no such impairment has occurred.

3.    RELATED PARTY TRANSACTIONS

      CITGO purchases approximately one-half of the crude oil processed in its
      refineries from subsidiaries of PDVSA under long-term supply agreements.
      These supply agreements extend through the year 2006 for the Lake Charles
      refinery, 2010 for the Paulsboro refinery, 2012 for the Corpus Christi
      refinery and 2013 for the Savannah refinery. CITGO purchased $1.7 billion,
      $1.4 billion, and $2 billion of crude oil, feedstocks and other products
      from wholly-owned subsidiaries of PDVSA in 1999, 1998, and 1997,
      respectively, under these and other purchase agreements. During 1999,
      PDVSA deliveries of crude oil to CITGO were less than contractual base
      volumes due to PDVSA declaration of force majeure pursuant to all four
      long-term crude oil supply contracts described above. As a result, CITGO
      has been required to obtain alternative sources of crude oil, which has
      resulted in lower operating margins. It is not possible to forecast the
      future financial impacts of these reductions in crude oil deliveries on
      CITGO's margins because the correlation between crude oil and refined
      product prices is not constant over time and the duration of force majeure
      cannot be predicted.

      Additionally, during the second half of 1999, PDVSA did not deliver naptha
      pursuant to one of the contracts and has made contractually specified
      payments in lieu thereof.

      The crude oil supply contracts incorporate formula prices based on the
      market value of a number of refined products deemed to be produced from
      each particular crude oil, less: (i) certain deemed refining


                                      F-11
<PAGE>

      costs adjustable for inflation, (ii) certain actual costs, including
      transportation charges, import duties and taxes and (iii) a deemed margin,
      which varies according to the grade of crude oil. At December 31, 1999 and
      1998, $178 million and $74 million, respectively, were included in
      payables to affiliates as a result of these transactions.

      An affiliate of PDVSA acquired a 50% equity interest in a refinery in
      Chalmette, Louisiana ("Chalmette"), in October 1997 and has assigned to
      CITGO its option to purchase up to 50% of the refined products produced at
      the refinery, through December 31, 2000. CITGO exercised this option on
      November 1, 1997, and acquired approximately 66 MBPD and 65 MBPD of
      refined products from the refinery in 1999 and 1998, respectively,
      approximately one-half of which was gasoline.

      Other affiliates of PDVSA entered into an agreement to acquire a combined
      50% equity interest in an integrated vacuum/coker facility at Phillips'
      oil refinery under construction in Sweeny, Texas ("Sweeny"), on October
      30, 1998.

      In October 1998, an affiliate of PDVSA acquired a 50% equity interest in a
      joint venture that owns and operates a refinery in St. Croix, U.S. Virgin
      Islands ("HOVENSA") and has the right under a product sales agreement to
      assign periodically to CITGO, or other related parties, its option to
      purchase 50% of the refined products produced by HOVENSA (less a certain
      portion of such products that HOVENSA will market directly in the local
      and Caribbean markets). In addition, under the product sales agreement,
      the PDVSA affiliate has appointed CITGO as its agent in designating which
      of its affiliates shall from time to time take deliveries of the refined
      products available to it. The product sales agreement will be in effect
      for the life of the joint venture, subject to termination events based on
      default or mutual agreement. Pursuant to the above arrangement, CITGO
      began acquiring approximately 118 MBPD and 120 MBPD of refined products
      from HOVENSA during 1999 and 1998, respectively, approximately one-half of
      which was gasoline.

      CITGO also purchases refined products from various other affiliates
      including LYONDELL-CITGO, HOVENSA and Chalmette under long-term contracts.
      These agreements incorporate various formula prices based on published
      market prices and other factors. Such purchases totaled $3.3 billion, $2.1
      billion and $2.0 billion for 1999, 1998 and 1997, respectively. At
      December 31, 1999 and 1998, $121 million and $44 million, respectively,
      was included in payables to affiliates as a result of these transactions.

      CITGO had refined product, feedstock, and other product sales to
      affiliates of $190 million, $164 million and $221 million in 1999, 1998
      and 1997, respectively. CITGO's sales of crude oil to affiliates were $37
      million, $18 million and $3 million in 1999, 1998 and 1997, respectively.
      At December 31, 1999 and 1998, $38 million and $34 million, respectively,
      were included in due from affiliates as a result of these and related
      transactions.

      Pursuant to the Refinery Agreement with PDVMR, on May 1, 1997, CITGO has
      been appointed operator of the PDVMR refinery. The term of the agreement
      is 60 months and shall be automatically renewed for periods of 12 months
      (subject to early termination as provided in the agreement). CITGO
      employed the substantial majority of employees previously employed by
      UNO-VEN and, as a result, CITGO assumed a liability for post retirement
      benefits other than pensions of $27 million related to those employees.
      CITGO also purchases the products produced at the refinery.

      PDVMR is party to a Contract for Purchase and Sale of Crude Oil dated
      April 23, 1997, with Maraven S.A. ("Maraven"), a corporation organized and
      existing, at the date of the contract, under the laws of the Bolivarian
      Republic of Venezuela, and CITGO. In accordance with the contract, Maraven
      (or its successor) is obligated to provide a base volume of up to 100,000
      barrels per day of Venezuelan crude, and CITGO as operator is responsible
      for administering the purchase of additional volumes of crude for the
      refinery. The Venezuelan crude is priced in accordance with a formula
      based upon posted crude


                                      F-12
<PAGE>


      prices less a quality differential. Maraven (or its successor), CITGO and
      PDVMR can change the amount and type of crude supplied in order to capture
      additional economic opportunities. The term of the agreement is 60 months
      with renewal periods of 12 months.

      PDVMR sells certain refinery by-products and utilities to The Needle Coker
      Company ("Needle") and buys back hydrogen, naphtha and steam. Sales to
      Needle were approximately $9 million and $13 million in 1999 and 1998,
      respectively. Purchases from Needle were approximately $6 million and $13
      million in 1999 and 1998, respectively.

      During 1995, the Company entered into a service agreement with PDVSA to
      provide financial and foreign agency services. Income from these services
      was $0.9 million, $1.7 million and $0.9 million in 1999, 1998 and 1997,
      respectively.

      Under a separate guarantee of rent agreement, PDVSA has guaranteed payment
      of rent, stipulated loss value and terminating value due under the lease
      of the Corpus Christi refinery facilities described in Note 14. The
      Company has also guaranteed debt of certain affiliates (Note 13).

      The notes receivable from PDVSA are unsecured and are comprised of $250
      million of 7.75% notes maturing on August 1, 2000 and $500 million of
      7.995% notes maturing on August 1, 2003. Interest on these notes is
      payable semiannually by PDVSA to the Company on February 1 and August 1 of
      each year, less one business day. Interest income attributable to such
      notes was approximately $59 million, $70 million and $78 million for the
      years ended December 31, 1999, 1998 and 1997, respectively, with
      approximately $25 million included in due from affiliates at December 31,
      1999 and 1998. The notes receivable from affiliate are unsecured and are
      comprised of two $130 million of 8.558% notes maturing on November 10,
      2013 and a $38 million 10.395% note maturing May 15, 2014. Interest on
      these notes is payable quarterly. Interest income attributable to such
      notes was approximately $24 million and $3 million at December 31, 1999
      and 1998, respectively, with approximately $4 million and $3 million
      included in due from affiliates at December 31, 1999 and 1998,
      respectively. Due to the related party nature of these notes receivable,
      it is not practicable to estimate their fair value.



                                      F-13

<PAGE>


4.    ACCOUNTS RECEIVABLE

                                                    1999              1998
                                                        (000s Omitted)

      Trade                                       $   931,615       $   541,613
      Credit card                                      93,132            47,096
      Other                                            20,831            23,051
                                                  -----------       -----------

                                                    1,045,578           611,760

      Less allowance for uncollectible accounts       (18,226)          (19,445)
                                                  -----------       -----------

                                                  $ 1,027,352       $   592,315
                                                  ===========       ===========

      Sales are made on account, based on pre-approved unsecured credit terms
      established by CITGO management. CITGO also has a proprietary credit card
      program which allows retail consumers to purchase fuel and convenience
      items at CITGO branded outlets. Allowances for uncollectible accounts are
      established based on several factors that include, but are not limited to,
      analysis of specific customers, historical trends, current economic
      conditions and other information.

      CITGO has two limited purpose subsidiaries, CITGO Funding Corporation and
      CITGO Funding Corporation II, which have non-recourse agreements to sell
      trade accounts and credit card receivables. Under the terms of the
      agreements, new receivables are added to the pool as collections reduce
      previously sold receivables. The amounts sold at any one time are limited
      to a maximum of $125 million of trade accounts receivable and $150 million
      of credit card receivables. These agreements expire on June 22, 2000 and
      May 8, 2000, respectively, and are renewable for successive one-year terms
      by mutual agreement. Fees and expenses of $15.2 million, $16.1 million and
      $5.8 million related to the agreements were recorded as other expense
      during the years ended December 31, 1999, 1998 and 1997, respectively.

5.    INVENTORIES

                                                      1999              1998
                                                         (000s Omitted)

      Refined product                              $  814,785          $580,666
      Crude oil                                       215,248           186,503
      Materials and supplies                           67,890            67,959
                                                   ----------          --------

                                                   $1,097,923          $835,128
                                                   ==========          ========


      Inventories at December 31, 1998 were carried at estimated net market
      value which was $171.6 million lower than historical cost. At December 31,
      1999, estimated net market values exceeded historical cost by
      approximately $418 million, and accordingly, no write-down was necessary.


                                      F-14
<PAGE>


6.    PROPERTY, PLANT AND EQUIPMENT

                                                       1999              1998
                                                           (000s Omitted)

      Land                                           $  138,684      $  140,047
      Building                                          494,474         498,066
      Machinery and equipment                         3,748,813       3,509,505
      Vehicles                                           26,131          34,434
      Construction in process                           138,979         186,436
                                                     ----------      ----------

                                                      4,547,081       4,368,488
      Accumulated depreciation and amortization      (1,129,266)       (948,435)
                                                     ----------      ----------

                                                     $3,417,815      $3,420,053
                                                     ==========      ==========


      Depreciation expense for 1999, 1998, and 1997 was $214 million, $203
      million, and $178 million, respectively.

      In 1997, CITGO incurred property damages from a fire at its Corpus
      Christi, Texas refinery (Note 13). Other income (expense) for the year
      ended December 31, 1997 includes $9.4 million of gains from insurance
      recoveries related to this event.

      Other income (expense) includes gains and losses on disposals and
      retirements of property, plant and equipment. Such net losses were
      approximately $18 million, $0 million and $13 million in 1999, 1998, and
      1997, respectively.

7.    INVESTMENT IN AFFILIATES

      CITGO - In addition to LYONDELL-CITGO (Note 2), CITGO's investments in
      affiliates consist of equity interests of 6.8 to 50% in joint interest
      pipelines and terminals, including a 13.98% interest in Colonial Pipeline
      Company; a 49.5% partnership interest in Nelson Industrial Steam Company
      ("NISCO"), which is a qualified cogeneration facility; and a 49%
      partnership interest in Mount Vernon Phenol Plant. The carrying value of
      these investments exceeded CITGO's equity in the underlying net assets by
      approximately $143 million and $151 million at December 31, 1999 and 1998,
      respectively.

      At December 31, 1999 and 1998, NISCO had a partnership deficit. CITGO's
      share of this deficit, as a general partner, was $60.3 million and $56.5
      million at December 31, 1999 and 1998, respectively, which is included in
      other noncurrent liabilities in the accompanying consolidated balance
      sheets.

      Information on CITGO's investments, including LYONDELL-CITGO, follows:

                                                           1999           1998
                                                               (000s Omitted)

      Investments in affiliates (excluding NISCO)        $ 734,822     $ 781,481
      Equity in net income of affiliates                    21,348        77,105
      Dividends and distributions received from
        affiliates                                         102,339       122,044


                                      F-15
<PAGE>



      Selected financial information provided by the affiliates is summarized as
      follows:

<TABLE>
<CAPTION>
                                                                 December 31,
                                             ------------------------------------------------------
                                                   1999              1998              1997
                                                                (000s Omitted)
      <S>                                      <C>               <C>               <C>
      Summary of financial position:
        Current assets                         $  469,101        $  464,047        $  511,848
        Noncurrent assets                       2,853,786         2,817,165         2,830,568
        Current liabilities                     1,034,181           670,045           627,296
        Noncurrent liabilities                  1,681,558         1,934,378         2,025,709

      Summary of operating results:
        Revenues                               $3,559,451        $3,337,449        $4,076,429
        Gross profit                              567,749           757,678           628,559
        Net income                                237,906           384,810           371,006
</TABLE>

      PDVMR - PDVMR has a 25% interest in Needle, which is accounted for using
      the equity method. PDVMR received cash distributions of approximately $3.0
      million and $6.5 million in 1999 and 1998, respectively, from Needle. The
      carrying value of this investment exceeded PDVMR's equity in the
      underlying net assets by approximately $5.7 million and $6.5 million at
      December 31, 1999 and 1998, respectively.

      Selected financial information for 1999 and 1998 provided by Needle is
      shown below:

                                                           1999          1998
                                                         (Dollars in Thousands)

      Summary of financial position:
        Current assets                                   $16,723        $17,162
        Noncurrent assets                                 61,459         66,149
        Current liabilities                                5,228          5,086
        Noncurrent liabilities                                 -              -

      Summary of operating results (full year):

        Revenues                                          61,845         74,150
        Gross profit                                       9,509         23,292
        Net earnings                                       6,729         20,933

8.    DISTRIBUTION OF UNO-VEN ASSETS

      Since 1989, the Company through various subsidiaries had a 50% interest in
      UNO-VEN. On May 1, 1997 pursuant to a Partnership Interest Retirement
      Agreement, PDV America and Union Oil Company of California ("UNOCAL")
      transferred certain assets and liabilities of UNO-VEN to PDVMR, a
      subsidiary of the Company, as a result of the liquidation of the Company's
      50% ownership interest in UNO-VEN. The assets included a 153 thousand
      barrel per day refinery in Lemont, Illinois, as well as eleven product
      distribution terminals and 89 retail sites located in the Midwest. CITGO
      operates these facilities and purchases the products produced at the
      refinery (Note 3).

      In connection with the transaction, the Company received a capital
      contribution of $250,000,000 from PDV Holding, the Company's parent. This
      contribution was used, in part, to pay off UNO-VEN's senior notes and to
      provide working capital.


                                      F-16
<PAGE>


      The transaction, for accounting purposes, has been treated as a purchase
      and, accordingly, the allocation of fair values to the underlying assets
      and liabilities acquired is based upon management's estimates and
      appraisals. Pro forma results of operations for this acquisition were not
      material.

      The allocation of the Company's basis in the partnership and the
      acquisition cost was as follows:

                                                      (000s Omitted)

      Accounts receivable                            $  26,300
      Inventory                                         72,200
      Property, plant and equipment                    576,800
      Investment in The Needle Coker Company            28,800
      Other assets                                      35,300
      Working capital facility with bank               (13,000)
      Other current liabilities                       (257,600)
      Long-term debt                                  (154,900)
      Other noncurrent liabilities                     (68,700)
                                                     ---------

      PDVMR's equity                                 $ 245,200
                                                     =========

      Information with respect to UNO-VEN for the four months ended April 30,
      1997 is as follows:

                                                                1997

      Equity in net income                                   $    450
      Distributions received from UNO-VEN                       5,194

      Summary of operating results:
        Revenues                                             $567,500
        Gross profit                                           37,400
        Net income                                                900

9.    SHORT-TERM BANK LOANS

      As of December 31, 1999, CITGO has established $184 million of
      uncommitted, unsecured, short-term borrowing facilities with various
      banks. Interest rates on these facilities are determined daily based upon
      the Federal funds' interest rates, and maturity options vary up to 30
      days. The weighted average interest rates actually incurred in 1999, 1998
      and 1997 were 5.5%, 5.8% and 5.9%, respectively. CITGO had $16 million and
      $37 million of borrowings outstanding under these facilities at December
      31, 1999 and 1998, respectively.


                                      F-17
<PAGE>


10.   LONG-TERM DEBT

                                                          1999           1998
                                                              (000's omitted)

      Revolving bank loans - CITGO                     $ 345,000      $ 165,000

      Revolving bank loan - PDVMR                        117,000         45,000

      Senior Notes $200 million face amount,
        due 2006 with interest rate of 7.875%            199,806        199,776

      Senior Notes due 2000 and 2003 with
        interest rates from 7.75% to 7.875%              748,151        747,723

      Private Placement Senior Notes, due 2000
        to 2006 with interest rates from 9.03%
        to 9.30%                                         136,688        176,623

      Master Shelf Agreement Senior Notes, due
        2002 to 2009 with interest rates from
        7.17% to 8.94%                                   260,000        260,000

      Tax Exempt Bonds, due 2004 to 2029 with
        variable and fixed interest rates                325,370        295,370

      Taxable Bonds, due 2026 to 2028 with
        variable interest rates                          178,000        208,000

      Cit-Con bank credit agreement                       14,286         21,429
                                                      ----------     ----------

                                                       2,324,301      2,118,921

      Current portion of long-term debt                 (314,078)       (47,078)
                                                      ----------     ----------

                                                      $2,010,223     $2,071,843
                                                      ==========     ==========

      On April 15, 1999, CITGO issued $25 million of tax-exempt revenue bonds
      due 2029. The proceeds were used to redeem $25 million of the taxable Gulf
      Coast environmental facilities revenue bonds due 2028.

      Revolving Bank Loans (CITGO) - CITGO's credit agreement with various banks
      consists of: (i) a $400 million, five-year, revolving bank loan maturing
      in May 2003 and (ii) a $150 million, 364 day, revolving bank loan, both of
      which are unsecured and have various borrowing maturities and interest
      rate options. Interest rates on the revolving bank loans were 7.8% and
      7.5% at December 31, 1999 and 1998, respectively.

      Revolving Bank Loans (PDVMR) - PDVMR has a revolving credit facility with
      a consortium of banks which is committed through April 28, 2002, and
      currently allows for borrowings up to $125 million at various interest
      rates. Inventories and accounts receivable of PDVMR are pledged as
      collateral. The weighted average interest rates at December 31, 1999 and
      1998 were 7.58% and 6.50%, respectively.


                                      F-18
<PAGE>

      This facility includes a provision for a mandatory amortization of the
      commitment amount, as follows:

                                                                  Remaining
                                        Reduction                 Commitment
                  Date                   Amount                     Level

             April 28, 2000            $25,000,000              $100,000,000
             April 28, 2001            $25,000,000              $ 75,000,000
             April 28, 2002            $75,000,000              $ -

      Shelf Registration - In April 1996, CITGO filed a registration statement
      with the Securities and Exchange Commission relating to the shelf
      registration of $600 million of debt securities that may be offered and
      sold from time to time. In May 1996, the registration became effective and
      CITGO sold a tranche of debt securities with an aggregate offering price
      of $200 million. On October 28, 1997, CITGO entered into a Selling Agency
      Agreement with Salomon Brothers Inc. and Chase Securities Inc. providing
      for the sale of up to an additional $235 million in aggregate principal
      amount of notes in tranches from time to time by CITGO under the shelf
      registration. No amounts were sold under this agreement as of December 31,
      1999.

      Senior Notes due 2000 and 2003 - In August 1993, the Company issued $1
      billion principal amount of Senior Notes (the "Senior Notes") with
      interest rates ranging from 7.25 to 7.875% with due dates ranging from
      1998 to 2003. Interest on the Senior Notes is payable semi-annually,
      commencing February 1, 1994. The Senior Notes represent senior unsecured
      indebtedness of the Company, and are structurally subordinated to the
      liabilities of the Company's subsidiaries. The Senior Notes are guaranteed
      by Propernyn and PDVSA.

      Private Placement - At December 31, 1999, CITGO has outstanding
      approximately $137 million of privately placed, unsecured Senior Notes.
      Principal amounts are payable in annual installments in November and
      interest is payable semi-annually in May and November.

      Master Shelf Agreement - At December 31, 1999, CITGO has outstanding $260
      million of privately placed senior notes under an unsecured Master Shelf
      Agreement with a insurance company. The notes have various fixed interest
      rates and maturities.

      Tax-Exempt Bonds - Through state entities, CITGO has issued $74.8 million
      of industrial development bonds for certain Lake Charles port facilities
      and pollution control equipment and $231 million of environmental revenue
      bonds to finance a portion of the Company's environmental facilities at
      its Lake Charles and Corpus Christi refineries and at the LYONDELL-CITGO
      refinery. Additional credit support for these bonds is provided through
      letters of credit. The bonds bear interest at various floating rates which
      ranged from 4.5% to 6.0% at December 31, 1999, and 4.1% to 6.0% at
      December 31, 1998.

      PDVMR has issued variable rate pollution control bonds, with interest
      currently paid monthly. The bonds have one payment at maturity in the year
      2008 to retire the principal, and principal and interest payments are
      guaranteed by a $20.3 million letter of credit.

      Taxable Bonds - Through state entities, CITGO has issued and currently
      outstanding $178 million of taxable environmental revenue bonds to finance
      a portion of CITGO's environmental facilities at its Lake Charles refinery
      and at the LYONDELL-CITGO refinery. Such bonds are secured by letters of
      credit and have floating interest rates (6.1% at December 31, 1999 and
      5.3% at December 31, 1998). At the option of CITGO and upon the occurrence
      of certain specified conditions, all or any portion of such taxable bonds
      may be converted to tax-exempt bonds. As of December 31, 1999, $17 million
      of originally issued taxable bonds had been converted to tax-exempt bonds.


                                      F-19
<PAGE>


      Cit-Con Bank Credit Agreement - The Cit-Con bank credit agreement consists
      of a term loan collateralized by throughput agreements of the owner
      companies. The loan contains various interest rate options (weighted
      average effective rates of 7.5% and 6.7% at December 31, 1999 and 1998,
      respectively), and requires quarterly principal payments through December
      2001.

      Covenants - The various agreements above contain certain covenants that,
      depending upon the level of capitalization and earnings of the Companies,
      could impose limitations on the ability of the Companies to pay dividends,
      incur additional debt, place liens on property, and sell fixed assets. The
      Companies were in compliance with the debt covenants at December 31, 1999.

      Future maturities of long-term debt as of December 31, 1999 are:
      2000-$314.1 million; 2001-$72.1 million; 2002-$111.4 million; 2003-$904.6
      million; 2004-$47.2 million; and $874.9 million thereafter.

      Interest Rate Swap Agreements - CITGO has entered into the following
      interest rate swap agreements to reduce the impact of interest rate
      changes on its variable interest rate debt:

      CITGO'S interest rate swap agreements:

                                                       Notional Principal Amount
                             Expiration     Fixed Rate   1999            1998
      Variable Rate Index       Date           Paid        (000s Omitted)

      One-month LIBOR        May 2000         6.28%    $ 25,000       $ 25,000
      J.J. Kenny             May 2000         4.72       25,000         25,000
      J.J. Kenny             February 2005    5.30       12,000         12,000
      J.J. Kenny             February 2005    5.27       15,000         15,000
      J.J. Kenny             February 2005    5.49       15,000         15,000
                                                       --------       --------

                                                       $ 92,000       $ 92,000
                                                       ========       ========

      Interest expense includes $1.5 million, $1.0 million and $0.8 million in
      1999, 1998 and 1997, respectively, related to interest paid on these
      agreements.

11.   EMPLOYEE BENEFIT PLANS

      Employee Savings - CITGO sponsors three qualified defined contribution
      retirement and savings plans covering substantially all eligible salaried
      and hourly employees. Participants make voluntary contributions to the
      plans and CITGO makes contributions, including matching of employee
      contributions, based on plan provisions. CITGO expensed $18 million, $19
      million and $19 million to operations related to its contributions to
      these plans in 1999, 1998 and 1997, respectively.

      Pension Benefits - CITGO sponsors three qualified noncontributory defined
      benefit pension plans, two of which cover eligible hourly employees and
      one of which covers eligible salaried employees. CITGO also sponsors three
      nonqualified defined benefit plans for certain eligible employees. The
      qualified plans' assets include corporate securities, a fixed income
      mutual fund, two collective funds and a short-term investment fund. The
      nonqualified plans are not funded.

      CITGO's policy is to fund the qualified pension plans in accordance with
      applicable laws and regulations and not to exceed the tax deductible
      limits. The nonqualified plans are funded as necessary to pay retiree
      benefits. The plan benefits for each of the qualified pension plans are
      primarily based on an employee's years of plan service and compensation as
      defined by each plan.

      Postretirement Benefits Other Than Pensions - In addition to pension
      benefits, the Companies also provide certain health care and life
      insurance benefits for eligible salaried and hourly employees at


                                      F-20

<PAGE>


      retirement. These benefits, are subject to deductibles, copayment
      provisions and other limitations and are primarily funded on a
      pay-as-you-go basis. The Companies reserve the right to change or to
      terminate the benefits at any time.

      The following sets forth the changes in benefit obligations and plan
      assets for the pension and postretirement plans for the years ended
      December 31, 1999 and 1998 and the funded status of such plans reconciled
      with amounts reported in the Companies' consolidated balance sheets:

<TABLE>
<CAPTION>
                                                               Pension Benefits              Other Benefits
                                                           -------------------------  ----------------------------
                                                             1999           1998           1999          1998
                                                               (000s Omitted)               (000s Omitted)

       <S>                                                 <C>          <C>            <C>           <C>
       Change in benefit obligation:
         Benefit obligation, beginning of year             $ 270,382    $ 233,486      $ 195,928     $ 180,406
         Service cost                                         19,554       17,742          6,922         6,610
         Interest cost                                        17,899       16,058         13,040        12,770
         Actuarial (gain) loss                               (39,996)      11,958        (19,540)        1,631
         Benefits paid                                        (9,136)      (8,862) `      (7,318)       (5,489)
                                                           ---------    ---------      ---------     ---------

       Benefit obligation, end of year                       258,703      270,382        189,032       195,928
                                                           ---------    ---------      ---------     ---------

       Change in plan assets:

         Fair value of plan assets, beginning of year        254,648      221,261            939           889
         Actual return on plan assets                         28,644       38,139             52            50
         Employer contribution                                 1,226        4,110          7,318         5,489
         Benefits paid                                        (9,136)      (8,862)        (7,318)       (5,489)
                                                           ---------    ---------      ---------     ---------

       Fair value of plan assets, end of year                275,382      254,648            991           939
                                                           ---------    ---------      ---------     ---------

       Funded status                                          16,679      (15,734)      (188,041)     (194,989)
       Unrecognized net actuarial gain                       (85,606)     (41,146)       (31,431)      (11,896)
       Unrecognized prior service cost                           107          147              -             -
       Net gain at date of adoption                           (1,012)      (1,280)             -             -
                                                           ---------    ---------      ---------     ---------

       Net amount recognized                               $ (69,832)   $ (58,013)     $(219,472)    $(206,885)
                                                           =========    =========      =========     =========

       Amounts recognized in the Company's
         consolidated balance sheets consist of:
         Accrued benefit liability                         $ (76,303)   $ (61,991)     $(219,472)    $(206,885)
         Intangible asset                                      1,245        3,978              -             -
         Accumulated other comprehensive income                5,226            -              -             -
                                                           ---------    ---------      ---------     ---------

       Net amount recognized                               $ (69,832)   $ (58,013)     $(219,472)    $(206,885)
                                                           =========    =========      =========     =========

                                                             Pension Benefits              Other Benefits

                                                         --------------------------  ----------------------------
                                                            1999        1998           1999         1998

       Weighted-average assumptions as of
         December 31:
         Discount rate                                      7.75%       6.75%          7.75%        6.75%
         Expected return on plan assets                     9.00%       9.00%          6.00%        6.00%
         Rate of compensation increase                      5.00%       5.00%             -            -
</TABLE>



                                      F-21

<PAGE>


      For measurement purposes, a 7.0% annual rate of increase in the per capita
      cost of covered health care benefits was assumed for 1999. The rate was
      assumed to decrease gradually to 5.5% for 2002 and remain at that level
      thereafter.

<TABLE>
<CAPTION>
                                                           Pension Benefits                       Other Benefits
                                                ------------------------------------  ------------------------------------
                                                  1999        1998        1997          1999        1998        1997
                                                         (000s Omitted)                        (000s Omitted)

      <S>                                       <C>          <C>         <C>           <C>         <C>          <C>
      Components of net periodic benefit
      cost:
        Service cost                            $  19,554    $ 17,742    $ 15,759      $ 6,922     $  6,610     $ 6,786
        Interest cost                              17,899      16,058      14,246       13,040       12,770      12,359
        Expected return on plan assets            (22,531)    (19,660)    (15,453)         (57)         (53)        (47)
        Amortization of prior service cost             40          40          40            -            -           -
        Amortization of net gain at date
          of adoption                                (268)       (268)       (268)           -            -           -
        Recognized net actuarial gain              (1,649)     (1,625)     (1,228)           -       (8,823)    (27,581)
                                                ---------    --------    --------      --------    --------    --------

      Net periodic benefit cost (credit)        $  13,045    $ 12,287    $ 13,096      $ 19,905    $ 10,504    $ (8,483)
                                                =========    ========    ========      ========    ========    ========
</TABLE>

      Actuarial gains (or losses) related to the postretirement benefit
      obligation are recognized as a component of net postretirement benefit
      cost by the amount the beginning of year unrecognized net gain (or loss)
      exceeds 7.5% of the accumulated postretirement benefit obligation.

      The projected benefit obligation, accumulated benefit obligation, and fair
      value of plan assets for the pension plan with accumulated benefit
      obligations in excess of plan assets were $23.4 million, $22.8 million and
      $0, respectively, as of December 31, 1999 and $18.2 million, $17.5 million
      and $0, respectively, as of December 31, 1998.

      Assumed health care cost trend rates have a significant effect on the
      amounts reported for the health care plans. A one-percentage point change
      in assumed health care cost trend rates would have the following effects:

                                                1-Percentage-     1-Percentage-
                                                Point Increase    Point Decrease

      Increase (decrease) in total of service
        and interest cost components            $ 4,252,000       $ (3,505,000)

      Increase (decrease) in postretirement
        benefit obligation                       34,215,000        (28,971,000)

      Employee Separation Programs - During 1997, CITGO's senior management
      implemented a Transformation Program which resulted in certain personnel
      reductions (the "Separation Programs"). CITGO expensed approximately $7
      million, $8 million and $22 million for the years ended December 31, 1999,
      1998 and 1997, respectively, relating to the Separation Programs.

      In accordance with the transfer of UNO-VEN's assets to PDVMR (Note 8), on
      May 1, 1997, PDVMR assumed the responsibility for UNO-VEN's pension plans,
      which include both a qualified and a nonqualified plan which were frozen
      at their current levels on April 30, 1997. The plans cover former UNO-VEN
      employees who were participants in the plans as of April 30, 1997. At
      December 31, 1999 and 1998, plan assets consisted of equity securities,
      bonds and cash.


                                      F-22
<PAGE>


      The following sets forth the changes in benefit obligations and plan
      assets for the years ended December 31, 1999 and 1998 and the funded
      status of the plans reconciled with amounts reported in the balance
      sheets:

                                                               Dollars in
                                                               Thousands
                                                           1999          1998

Change in benefit obligation:
  Benefit obligation, beginning of year                 $ 64,771       $61,018
  Interest cost                                            4,298         4,348
  Actuarial (gain) loss                                  (10,353)        5,735
  Benefits paid                                           (8,329)       (6,330)
                                                        --------       -------

Benefit obligation, end of year                           50,387        64,771
                                                        --------       -------

Change in plan assets:
  Fair value of plan assets, beginning of year            68,057        65,792
  Actual return on plan assets                            10,054         8,148
  Employer contribution                                        -           447
  Benefits paid                                           (8,329)       (6,330)
                                                        --------       -------

Fair value of plan assets, end of year                    69,782        68,057
                                                        --------       -------

Funded status                                             19,395         3,286
Unrecognized net actuarial (gain) loss                   (11,448)        2,997
                                                        --------       -------

Prepaid benefit cost                                    $  7,947       $ 6,283
                                                        ========       =======

                                                           1999          1998

Weighted-average assumptions as of December 31:
  Discount rate                                            7.75%         6.75%
  Expected return on plan assets                           9.50%         9.50%

                                                           1999          1998

Components of net periodic benefit credit:
  Interest cost                                         $  4,298      $ 4,348
  Expected return on plan assets                          (5,996)      (5,482)
  Recognized net actuarial loss                               34          215
                                                        --------      -------

Net periodic benefit credit                             $ (1,664)     $  (919)
                                                        ========      =======

      The projected benefit obligation of the nonqualified plan (which equals
      the accumulated benefit obligation for this plan) was $380,250 as of
      December 31, 1999 and $423,802 as of December 31, 1998. The plan is
      unfunded.


                                      F-23
<PAGE>


12.   INCOME TAXES

      The provisions for income taxes are comprised of the following:

                                    1999           1998          1997
                                              (000s Omitted)

Current:
  Federal                        $  (15,910)   $    41,085    $   24,369
  State                                 674          5,896          (346)
                                 ----------    -----------    ----------

                                    (15,236)        46,981        24,023

Deferred                             73,466         84,004        82,145
                                 ----------    -----------    ----------

                                 $   58,230    $   130,985    $  106,168
                                 ==========    ===========    ==========

      The Federal statutory tax rate differs from the effective rate due to the
      following:

                                              1999         1998       1997

Federal statutory tax rate                    35.0%       35.0%      35.0%
State taxes, net of Federal benefit            2.6         1.7        2.7
Dividend exclusions                           (4.0)       (2.0)      (2.3)
Tax settlement                                (5.7)         -        (4.9)
Other                                          1.1         1.5        1.2
                                              -----       -----      -----

Effective tax rate                            29.0%       36.2%      31.7%
                                              =====       =====      =====

      The effective tax rates for 1999 and 1997 were unusually low due primarily
      to the favorable resolution in each of these years with the Internal
      Revenue Service of significant tax issues related to environmental
      expenditures.


                                      F-24
<PAGE>


      Deferred income taxes reflect the net tax effects of: (i) temporary
      differences between the financial and tax bases of assets and liabilities,
      and (ii) loss and tax credit carryforwards. The tax effects of significant
      items comprising the net deferred tax liability of the Companies as of
      December 31, 1999 and 1998, are as follows:

<TABLE>
<CAPTION>
                                                                  December 31,
                                                          ------------------------------
                                                              1999               1998
                                                                   (000s Omitted)
<S>                                                       <C>                <C>
      Deferred tax liabilities:
        Property, plant and equipment                     $  648,298         $  625,204
        Inventories (including in 1998,
          the effect of adjustment to market)                106,457             21,091
        Investments in affiliates                            135,279            120,480
        Other                                                 70,985             63,641
                                                          ----------         ----------

                                                             961,019            830,416
                                                          ----------         ----------
      Deferred tax assets:
        Postretirement benefit obligations                    77,371             74,331
        Marketing and promotional accruals                     9,271             12,773
        Employee benefit accruals                             38,893             34,029
        Alternative minimum tax credit carryforward           44,278             45,678
        Net operating loss carryforward                       58,352                  -
        Other                                                115,925              7,589
                                                          ----------         ----------

                                                             344,090            264,400
                                                          ----------         ----------

      Net deferred tax liability (of which $0
        and $55,447 is included in prepaid
        expenses and other at December 31, 1999
        and 1998, respectively)                           $  616,929         $  566,016
                                                          ==========         ==========
</TABLE>

      At December 31, 1998, the Companies had capital loss carryforwards of $6.7
      million. At December 31, 1998, a valuation allowance of $1.0 million was
      established related to that portion of the carryforwards for which it was
      considered more likely than not that the related tax benefits would not be
      realized before expiration.

      During 1999, the Companies filed a claim with the IRS to reclassify
      certain losses from capital to ordinary. The Companies were successful and
      were able to utilize all capital loss carryforwards in their 1998 tax
      return. Therefore, at December 31, 1999, no capital loss carryforwards
      exist.

      At December 31, 1999, the Companies had a net operating loss carryforward
      of $164.6 million, which will expire in 2019.

      The Companies alternative minimum tax credit carryforwards are available
      to offset regular Federal income taxes in future years without expiration,
      subject to certain alternative minimum tax limitations.

      On April 26, 1999, the Companies filed a claim with the Internal Revenue
      Service for foreign tax credits for Venezuelan income taxes withheld on
      interest payments from PDVSA to PDV America, Inc. for tax years 1993
      through 1995. The total foreign tax credits claimed for these years is
      approximately $9.8 million. The field auditor has allowed the claim in his
      Revenue Agents Report. However, due to other unagreed to issues, the case
      has been forwarded to IRS Appeals and to date is still in Appeals.
      Therefore, the refunds have not been received, but the Companies fully
      believe that the refunds will be forthcoming. In addition, the Companies
      filed a claim for similar foreign tax credits for the 1996 and 1997 tax
      years. The total foreign tax credits for these years is approximately $8.1
      million. The audit for these years is currently in process, but the
      Companies believe that the claim will be allowed in full and the refunds
      will be forthcoming.

                                      F-25
<PAGE>


13.   COMMITMENTS AND CONTINGENCIES

      Litigation and Injury Claims - Various lawsuits and claims arising in the
      ordinary course of business are pending against the Companies. The
      Companies record accruals for potential losses when, in management's
      opinion, such losses are probable and reasonably estimable. If known
      lawsuits and claims were to be determined in a manner adverse to the
      Companies, and in amounts greater than the accruals of the Companies, then
      such determinations could have a material adverse effect on the results of
      operations of the Companies in a given reporting period. However, in
      management's opinion, the ultimate resolution of these lawsuits and claims
      will not exceed, by a material amount, the amount of the accruals and the
      insurance coverage available to the Companies. This opinion is based upon
      management's and counsel's current assessment of these lawsuits and
      claims. The most significant lawsuits and claims are discussed below.

      Litigation is pending in federal court in Lake Charles, Louisiana, against
      CITGO by a number of current and former Lake Charles refinery employees
      and applicants asserting claims of racial discrimination in connection
      with CITGO's employment practices. The first trial in this case, which
      involved two plaintiffs, began in October 1999 and resulted in verdicts
      for CITGO. The Court granted CITGO's motion for summary judgment with
      respect to another group of claims; an appeal of this ruling is expected.
      Trials of the remaining cases are currently stayed.

      The case brought in the United States District Court for the Northern
      District of Illinois by the Oil Chemical & Atomic Workers, Local 7-517
      against UNO-VEN, CITGO, PDVSA, PDV America, and UNOCAL pursuant to Section
      301 of the Labor Management Relations Act ("LMRA") resulted in the court's
      ruling in favor of all defendants on Motions for Summary Judgment in June,
      1998; this ruling was affirmed on appeal and the case is now terminated.

      In the case of Francois Oil Company, Inc. versus Stop-N'-Go of Madison,
      Inc., et al, filed in federal district court in Wisconsin, Stop-N-Go, a
      former UNO-VEN marketer, sued UNO-VEN for $1 million, alleging that
      UNO-VEN had fraudulently induced it to breach a supply contract with
      Francois Oil. UNO-VEN's motion for summary judgment was granted in
      September, 1998; this ruling was affirmed on appeal, terminating this
      case.

      Four former UNO-VEN marketers have filed a class action complaint against
      UNO-VEN alleging improper termination of the UNO-VEN Marketer Sales
      Agreement under the Petroleum Marketing Practices Act in connection with
      PDVMR's 1997 acquisition of Unocal's interest in UNO-VEN. The lawsuit is
      pending in U.S. District Court in Wisconsin and is in the discovery phase.

      PDVMR and the Company, jointly and severally, have agreed to indemnify
      UNO-VEN and certain other related entities against certain liabilities and
      claims, including the preceding two matters.

      In May 1997, an explosion and fire occurred at CITGO's Corpus Christi
      refinery. No serious personal injuries were reported. CITGO received
      approximately 7,500 individual claims for personal injury and property
      damage related to the above noted incident. Approximately 1,300 of these
      claims have been resolved for amounts which individually and collectively
      were not material. There are presently seventeen lawsuits filed on behalf
      of approximately 9,000 individuals arising out of this incident in federal
      and state courts in Corpus Christi alleging property damages, personal
      injury and punitive damages. A trial of one of the federal court lawsuits
      in October 1998 involving ten bellwether plaintiffs, out of approximately
      400 plaintiffs, resulted in a verdict for CITGO. The remaining plaintiffs
      in this case have agreed to settle for an immaterial amount.

      A class action lawsuit is pending in Corpus Christi, Texas state court
      against CITGO and other operators and owners of nearby industrial
      facilities which claims damages for reduced value of residential
      properties located in the vicinity of the industrial facilities as a
      result of air, soil and

                                      F-26
<PAGE>


      groundwater contamination. CITGO has contracted to purchase all of the 275
      properties included in the lawsuit which are in an area adjacent to
      CITGO's Corpus Christi refinery and settle the property damage claims
      relating to these properties. Related to this purchase, $15.7 million was
      expensed in 1997. The trial judge recently ruled, over CITGO's objections,
      that a settlement agreement CITGO entered into in September 1997 and
      subsequently withdrew from, which provided for settlement of the remaining
      property damage claims for $5 million, is enforceable. CITGO believes this
      ruling is erroneous and will appeal. The trial against CITGO of these
      remaining claims will be postponed indefinitely. Two related personal
      injury and wrongful death lawsuits were filed against the same defendants
      in 1996, one of which is scheduled for trial in 2000. A trial date for the
      other case has not been set.

      CITGO is among defendants to lawsuits in California, North Carolina and
      New York alleging contamination of water supplies by methyl tertiary butyl
      ether ("MTBE"), a component of gasoline. The action in California was
      filed in November 1998 by the South Tahoe Public Utility District and
      CITGO was added as a defendant in February 1999. The North Carolina case,
      filed in January 1999, and the New York case, filed in January 2000, are
      putative class actions on behalf of owners of water wells and other
      drinking water supplies in the states. All of these actions allege that
      MTBE poses public health risks. These matters are in early stages of
      discovery. CITGO has denied all of the allegations and is pursuing its
      defenses.

      Environmental Compliance and Remediation - The Companies are subject to
      various Federal, state and local environmental laws and regulations which
      may require the Companies to take action to correct or improve the effects
      on the environment of prior disposal or release of petroleum substances by
      the Companies or other parties. Management believes the Companies are in
      compliance with these laws and regulations in all material respects.
      Maintaining compliance with environmental laws and regulations in the
      future could require significant capital expenditures and additional
      operating costs.

      In 1992, CITGO reached an agreement with a state agency to cease usage of
      certain surface impoundments at CITGO's Lake Charles refinery by 1994. A
      mutually acceptable closure plan was filed with the state in 1993. CITGO
      and a former owner are participating in the closure and sharing the
      related costs based on estimated contributions of waste and ownership
      periods. The remediation commenced in December 1993. In 1997, CITGO
      presented a proposal to a state agency revising the 1993 closure plan. In
      1998, the Company amended its 1997 proposal as requested by the state
      agency. A ruling on the proposal, as amended, is expected in 2000 with
      final closure to begin in 2002.

      In 1992, an agreement was reached between CITGO and a former owner
      concerning a number of environmental issues. The agreement consisted, in
      part, of payments to CITGO totaling $46 million. The former owner will
      continue to share the costs of certain specific environmental remediation
      and certain tort liability actions based on ownership periods and specific
      terms of the agreement.

      The Texas Natural Resource Conservation Commission ("TNRCC") conducted an
      environmental compliance review at the Corpus Christi Refinery in the
      first and second quarters of 1998. In January 1999, the TNRCC issued to
      CITGO a Notice of Violation ("NOV") arising from this review and in
      October 1999 proposed fines of approximately $1.6 million related to the
      NOV. Most of the alleged violations refer to recordkeeping and reporting
      issues, failure to keep proper records, failure to meet required emissions
      levels, and failure to properly monitor emissions. TNRCC issued to CITGO
      another NOV in December 1999 based on its 1999 audits which cites items
      similar to items cited earlier and the agency has tentatively suggested
      that the two audits should be combined for resolution. CITGO intends to
      vigorously protest the alleged violations and proposed fines.

      In June 1999, CITGO and numerous other industrial companies received
      notice from the U.S. Environmental Protection Agency ("EPA") that the EPA
      believes these companies have contributed to contamination in the
      Calcasieu Estuary, in the proximity of Lakes Charles, Calcasieu Parish,
      Louisiana

                                      F-27
<PAGE>


      and are Potentially Responsible Parties ("PRPs") under the Comprehensive
      Environmental Response, Compensation, and Liability Act ("CERCLA"). The
      EPA made a demand for payment of its past investigation costs from CITGO
      and other PRPs and advised it intends to conduct a Remedial
      Investigation/Feasibility Study ("RI/FS") under the CERCLA authority.
      CITGO and other PRPs may be potentially responsible for the costs of the
      RI/FS. CITGO disagrees with the EPA's allegations and intends to contest
      this matter.

      In October 1999, the EPA issued a NOV to CITGO for violations of federal
      regulations regarding reformulated gasoline found during a May 1998
      inspection at CITGO's Braintree, Massachusetts terminal and recommended a
      penalty of $218,500. CITGO intends to vigorously contest the proposed
      fines and allegations.

      Based on currently available information, including the continuing
      participation of the former owner in remediation actions, management
      believes its accruals for potential environmental liabilities are
      adequate. Conditions which would require additional expenditures may exist
      for various Company sites including, but not limited to, the Company's
      operating refinery complexes, closed refineries, service station sites and
      crude oil and petroleum product storage terminals. The amount of such
      future expenditures, if any, is indeterminable.

      Supply Agreements - CITGO purchases the crude oil processed at its
      refineries and also purchases refined products to supplement the
      production from its refineries to meet market demands and resolve
      logistical issues. In addition to supply agreements with various
      affiliates (Note 3), CITGO has various other crude oil, refined product
      and feedstock purchase agreements with unaffiliated entities with terms
      ranging from monthly to annual renewal. CITGO believes these sources of
      supply are reliable and adequate for its current requirements.

      Throughput Agreements - CITGO has throughput agreements with certain
      pipeline affiliates (Note 7). These throughput agreements may be used to
      secure obligations of the pipeline affiliates. Under these agreements,
      CITGO may be required to provide its pipeline affiliates with additional
      funds through advances against future charges for the shipping of
      petroleum products. CITGO currently ships on these pipelines and has not
      been required to advance funds in the past. At December 31, 1999, CITGO
      has no fixed and determinable, unconditional purchase obligations under
      these agreements.

      Commodity Derivative Activity - The Companies' commodity derivatives are
      generally entered into through major brokerage houses and traded on
      national exchanges and can be settled in cash or through delivery of the
      commodity. Such contracts generally qualify for hedge accounting and
      correlate to market price movements of crude oil and refined products.
      Resulting gains and losses, therefore, will generally be offset by gains
      and losses on the Companies' hedged inventory or future purchases and
      sales. The Companies' derivative commodity activity is closely monitored
      by management and contract periods are generally less than 30 days.
      Unrealized and deferred gains and losses on these contracts at December
      31, 1999 and 1998 and the effects of realized gains and losses on cost of
      sales and pretax earnings for 1999, 1998 and 1997 were not material. At
      times during 1998, the Companies entered into commodity derivatives
      activities that were not related to the hedging program discussed above.
      This activity and the resulting gains and losses were not material in
      1998. There was no nonhedging activity in 1999 or 1997.

      Other Credit and Off-Balance-Sheet Risk Information as of December 31,
      1999 - CITGO has guaranteed approximately $14 million of debt of certain
      of its marketers and an affiliate. Such debt is substantially
      collateralized by assets of these entities. CITGO has also guaranteed
      approximately $101 million of debt of certain affiliates, including $50
      million related to HOVENSA (Note 3) and $11 million related to NISCO (Note
      7). CITGO and PDVMR have outstanding letters of credit totaling
      approximately $566 million which includes $525 million related to CITGO's
      tax-exempt and taxable revenue bonds and $20 million related to PDVMR's
      pollution control bonds (Note 10). CITGO has

                                      F-28
<PAGE>


      also acquired surety bonds totaling $40 million primarily due to
      requirements of various government entities. CITGO does not expect
      liabilities to be incurred related to such guarantees, letters of credit
      or surety bonds.

      Neither CITGO nor the counterparties are required to collateralize their
      obligations under interest rate swaps or caps or over-the-counter
      derivative commodity agreements. CITGO is exposed to credit loss in the
      event of nonperformance by the counterparties to these agreements, but has
      no off-balance-sheet risk of accounting loss for the notional amounts.
      CITGO does not anticipate nonperformance by the counterparties, which
      consist primarily of major financial institutions.

      Management considers the market risk to the Companies related to its
      commodity and interest rate derivatives to be insignificant during the
      periods presented.

14.   LEASES

      CITGO leases certain of its Corpus Christi refinery facilities under a
      capital lease. The basic term of the lease expires on January 1, 2004;
      however, CITGO may renew the lease until January 31, 2011, the date of its
      option to purchase the facilities at a nominal amount. Capitalized costs
      included in property, plant and equipment related to the leased assets
      were approximately $209 million at December 31, 1999 and 1998. Accumulated
      amortization related to the leased assets was approximately $110 million
      and $102 million at December 31, 1999 and 1998, respectively. Amortization
      is included in depreciation expense.






                                      F-29
<PAGE>


      The Companies also have various noncancelable operating leases, primarily
      for product storage facilities, office space, computer equipment and
      vehicles. Rent expense on all operating leases totaled $35 million, $34
      million and $39 million in 1999, 1998 and 1997, respectively. Future
      minimum lease payments for the capital lease and noncancelable operating
      leases are as follows:

<TABLE>
<CAPTION>
                                                          Capital          Operating
                                                           Lease            Leases             Total

      Year                                                                (000s Omitted)
<S>                                                       <C>              <C>               <C>
      2000                                                $ 27,375         $  34,586         $  61,961
      2001                                                  27,375            30,833            58,208
      2002                                                  27,375            25,311            52,686
      2003                                                  27,375            18,665            46,040
      2004                                                   5,000            15,238            20,238
      Thereafter                                            31,000            26,077            57,077
                                                          --------         ---------        ----------

      Total minimum lease payments                         145,500         $ 150,710         $ 296,210
                                                          --------         =========         =========

      Amount representing interest                         (43,574)
                                                          --------

      Present value of minimum lease payments              101,926
      Current portion                                       16,356
                                                          --------

                                                          $ 85,570
                                                          ========
</TABLE>

15.   FAIR VALUE INFORMATION

      The following disclosure of the estimated fair value of financial
      instruments is made in accordance with the requirements of SFAS No. 107,
      Disclosures About Fair Value of Financial Instruments. The estimated fair
      value amounts have been determined by the Companies, using available
      market information and appropriate valuation methodologies. However,
      considerable judgment is necessarily required in interpreting market data
      to develop the estimates of fair value. Accordingly, the estimates
      presented herein are not necessarily indicative of the amounts that the
      Companies could realize in a current market exchange. The use of different
      market assumptions and/or estimation methodologies may have a material
      effect on the estimated fair value amounts.

      The carrying amounts of cash equivalents, restricted cash and
      variable-rate debt approximate fair value. The carrying amounts and
      estimated fair values of the Companies' other financial instruments are as
      follows:

<TABLE>
<CAPTION>

                                                    1999                                  1998
                                                ------------------------------        ------------------------------
                                                  Carrying            Fair              Carrying            Fair
                                                   Amount             Value              Amount             Value

                                                         (000s Omitted)                       (000s Omitted)
<S>                                              <C>               <C>                 <C>               <C>
      Liabilities:
        Short-term bank loans                      $16,000           $16,000             $37,000           $37,000
        Long-term debt                           2,324,301         2,264,954           2,118,921         2,087,675

      Derivative and off-balance-
        sheet financial instruments -
        unrealized losses:

        Interest rate swap agreements                    -            (1,281)                  -            (2,983)
        Guarantees of debt                               -              (898)                  -              (601)
        Letters of credit                                -            (4,443)                  -            (3,015)
        Surety bonds                                     -              (159)                  -              (147)
</TABLE>

                                      F-30
<PAGE>

      Short-Term Bank Loans and Long-Term Debt - The fair value of short-term
      bank loans and long-term debt is based on interest rates that are
      currently available to the Companies for issuance of debt with similar
      terms and remaining maturities, except for the Company's $750 million
      principle amount senior notes which were based upon quoted market prices.

      Interest Rate Swap and Cap Agreements - The fair value of these agreements
      is based on the estimated amount that the Company would receive or pay to
      terminate the agreements at the reporting date, taking into account
      current interest rates and the current creditworthiness of the
      counterparties.

      Guarantees, Letters of Credit and Surety Bonds - The estimated fair value
      of contingent guarantees of third-party debt, letters of credit and surety
      bonds is based on fees currently charged for similar one-year agreements
      or on the estimated cost to terminate them or otherwise settle the
      obligations with the counterparties at the reporting dates.

      The fair value estimates presented herein are based on pertinent
      information available to management as of the reporting dates. Although
      management is not aware of any factors that would significantly affect the
      estimated fair value amounts, such amounts have not been comprehensively
      revalued for purposes of these financial statements since that date, and
      current estimates of fair value may differ significantly from the amounts
      presented herein.

16.   QUARTERLY RESULTS OF OPERATIONS - UNAUDITED

      The following is a summary of the quarterly results of operations for the
      years ended December 31, 1999 and 1998 (in thousands):

<TABLE>
<CAPTION>

      1999                                            1st Qtr.          2nd Qtr.         3rd Qtr.          4th Qtr.
<S>                                                   <C>               <C>              <C>               <C>
      Sales                                           $  2,259,110      $  3,160,048     $  3,673,334      $  4,239,340
                                                      ============      ============     ============      ============

      Cost of sales and operating expenses            $  2,055,803      $  3,032,147     $  3,542,097      $  4,177,180
                                                      ============      ============     ============      ============

      Net income (loss)                               $     78,313      $     29,951     $     40,451      $     (6,530)
                                                      ============      ============     ============      =============

      1998                                            1st Qtr.          2nd Qtr.         3rd Qtr.          4th Qtr.

      Sales                                           $  2,748,946      $  2,944,287     $  2,731,898      $  2,541,898
                                                      ============      ============     ============      ============

      Cost of sales and operating expenses            $  2,536,189      $  2,752,531     $  2,523,825      $  2,495,404
                                                      ============      ============     ============      ============

      Net income (loss)                               $     95,338      $     70,620     $     85,369      $    (20,609)
                                                      ============      ============     ============      =============

</TABLE>
                                                      ******



                                      F-31
<PAGE>


                                                Commission File Number 001-12138



                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                              --------------------



                                    EXHIBITS

                                   FILED WITH

                                    FORM 10-K

              ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

                         SECURITIES EXCHANGE ACT OF 1934

                   For the fiscal year ended December 31, 1999

                              --------------------


                                PDV America, Inc.

             (Exact name of registrant as specified in its charter)


<PAGE>


                                INDEX TO EXHIBITS

                                                                 Sequential Page
Exhibits                                                                  Number
--------                                                                  ------
     (1)      Financial Statements:

     Independent Auditors' Report............................................F-1

     Consolidated Balance Sheets at December 31, 1999 and 1998...............F-2
     Consolidated Statements of Income and Comprehensive Income for
              each of the years ended December 31, 1999,
              1998 and 1997..................................................F-3
     Consolidated Statements of Shareholder's Equity for each of
              the years ended December 31, 1999, 1998 and 1997...............F-4
     Consolidated Statements of Cash Flows for each of
              the years ended December 31, 1999, 1998 and 1997...............F-5
     Notes to the Consolidated Financial Statements..........................F-7

     (2)      None

     (3)      Exhibits:

              The exhibit Index in part c., below, lists the
              exhibits that are filed as part of, or incorporated
              by reference into, this report.

(b)      Reports on Form 8-K

              None





                                       i
<PAGE>



c.       Exhibits

      *3.1       Certificate  of  Incorporation,  Certificate  of Amendment of
                 Certificate  of  Incorporation  and By-laws of PDV America

      *4.1       Indenture, dated as of August 1, 1993, among PDV
                 America, Propernyn, PDVSA and Citibank, N.A., as trustee,
                 relating to PDV America's 7-1/4% Senior Notes Due 1998, 7-3/4%
                 Senior Notes Due 2000 and 7-7/8% Senior Notes Due 2003

      *4.2       Form of Senior Note (included in Exhibit 4.1)

     *10.1       Crude Supply Agreement, dated as of September 30, 1986,
                 between CITGO Petroleum Corporation and Petroleos de Venezuela,
                 S.A.

     *10.2       Supplemental Crude Supply Agreement, dated as of September 30,
                 1986, between CITGO Petroleum Corporation and Petroleos de
                 Venezuela, S.A.

     *10.3       Crude Oil and Feedstock Supply Agreement, dated as of March 31,
                 1987, between Champlin Refining Company and Petroleos de
                 Venezuela, S.A.

     *10.4       Supplemental Crude Oil and Feedstock Supply Agreement, dated as
                 of March 31, 1987, between Champlin Refining Company and
                 Petroleos de Venezuela, S.A.

     *10.5       Contract for the Purchase/Sale of Boscan Crude Oil, dated as of
                 June 2, 1994, between Tradecal, S.A. and CITGO Asphalt Refining
                 Company

     *10.6       Restated Contract for the Purchase/Sale of Heavy/Extra Heavy
                 Crude Oil, dated December 28, 1990, among Maraven, S.A.,
                 Lagoven, S.A., and Seaview Oil Company

     *10.7       Sublease Agreement, dated as of March 31, 1987, between
                 Champlin Petroleum Company, as Sublessor, and Champlin Refining
                 Company, as Sublessee

     *10.8       Operating Agreement, dated as of May 1, 1984, among Cit-Con Oil
                 Corporation, CITGO Petroleum Corporation and Conoco, Inc.

     *10.9       Amended and Restated Limited Liability Company Regulations of
                 LYONDELL-CITGO Refining Company, Ltd. dated July 1, 1993

     *10.10      Contribution Agreement among Lyondell Petrochemical Company,
                 LYONDELL-CITGO Refining Company, Ltd. and Petroleos de
                 Venezuela, S.A.

-----------------------
*    Previously filed in connection with the Registrant's Registration Statement
     on Form F-1, Registration No. 33-63742, originally filed with the
     Commission on June 2, 1993.

                                       ii
<PAGE>


     *10.11      Crude Oil Supply Agreement, dated as of May 5, 1993, between
                 LYONDELL-CITGO Refining Company, Ltd. and Lagoven, S.A.

     *10.12      Supplemental Supply Agreement, dated as of May 5, 1993, between
                 LYONDELL-CITGO Refining Company, Ltd. and Petroleos de
                 Venezuela, S.A.

     *10.13      The UNO-VEN Company Partnership Agreement, dated as of December
                 4, 1989, between Midwest 76, Inc. and VPHI Midwest, Inc.

     *10.14      Supply Agreement, dated as of December 1, 1989, between The
                 UNO-VEN Company and Petroleos de Venezuela, S.A.

     *10.15      Supplemental Supply Agreement, dated as of December 1, 1989,
                 between The UNO-VEN Company and Petroleos de Venezuela, S.A.

     *10.16      Tax Allocation Agreement, dated as of June 24, 1993, among PDV
                 America, Inc., VPHI Midwest, Inc., CITGO Petroleum Corporation
                 and PDV USA, Inc., as amended

    **10.17      Amendment and Supplement to Supply Agreement, dated as of May
                 11, 1994, between The UNO-VEN Company and Tradecal, S.A., as
                 assignee of Petroleos de Venezuela, S.A.

   ***10.18      $150,000,000 Credit Agreement, dated May 13, 1998 between CITGO
                 Petroleum Corporation and the Bank of America National Trust
                 and Savings Association, The Bank of New York, the Royal Bank
                 of Canada and Other Financial Institutions

   ***10.19      $400,000,000 Credit Agreement, dated May 13, 1998 between CITGO
                 Petroleum Corporation and the Bank of America National Trust
                 and Savings Association, The Bank of New York, the Royal Bank
                 of Canada and Other Financial Institutions

   ***10.20      Limited Partnership Agreement of LYONDELL-CITGO Refining LP,
                 dated December 31, 1998

-------------------
*    Previously filed in connection with the Registrant's Registration Statement
     on Form F-1, Registration No. 33-63742, originally filed with the
     Commission on June 2, 1993.

**   Previously filed in connection with the Registrant's Annual Report on Form
     10-K for the fiscal year ended December 31, 1994.

***  Previously filed as an Exhibit to CITGO Petroleum Corporation's ("CITGO")
     Form 10-K (File No. 1-14380) and incorporated herein by this reference.

                                      iii
<PAGE>


   ***10.21      Loan Agreement with PDVSA Finance Ltd. consisting of a
                 Promissory Note in the amount of $130,000,000, dated November
                 10, 1998

   ***10.22      Loan Agreement with PDVSA Finance Ltd. consisting of a
                 Promissory Note in the amount of $130,000,000, dated November
                 10, 1998

      10.23      Loan agreement with PDVSA Finance Ltd. consisting of a
                 Promissory Note in the amount of $38,000,000, dated July 2,
                 1999

      12.1       Computation of Ratio of Earnings to Fixed Charges

      21.1       List of Subsidiaries of the Registrant

      27.1       Financial Data Schedule

--------------------
*    Previously filed in connection with the Registrant's Registration Statement
     on Form F-1, Registration No. 33-63742, originally filed with the
     Commission on June 2, 1993.

**   Previously filed in connection with the Registrant's Annual Report on Form
     10-K for the fiscal year ended December 31, 1994.

***  Previously filed as an Exhibit to PDV America's Form 10-K for the fiscal
     year ended December 31, 1998.




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