<PAGE>
================================================================================

                                  United States

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D. C. 20549


                                    FORM 10-Q


   [X]       QUARTERLY REPORT PURSUANT TO SECTION 13 0R 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2002

                                       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 1-14380

                           CITGO PETROLEUM CORPORATION
             (Exact name of registrant as specified in its charter)


                   DELAWARE                                73-1173881
                   --------                                ----------
      (State or other jurisdiction of                  (I. R. S. Employer
      incorporation or organization)                   Identification No.)

      ONE WARREN PLACE, 6100 SOUTH YALE AVENUE, TULSA, OKLAHOMA 74136
      ---------------------------------------------------------------
        (Address of principal executive office)           (Zip Code)

                                 (918) 495-4000
                                 --------------
              (Registrant's telephone number, including area code)


                                      N. A.
         ---------------------------------------------------------------
         (Former name, former address and former fiscal year, if changed
                               since last report)


      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
                                                ---     ---

      Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.


          COMMON STOCK, $1.00 PAR VALUE                 1,000
          -----------------------------                 -----
                    (Class)                 (outstanding at October 31, 2002)

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

<PAGE>
CITGO PETROLEUM CORPORATION

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2002

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

<S>           <C>                                                                                   <C>
FACTORS AFFECTING FORWARD LOOKING STATEMENTS.........................................................1

PART I.       FINANCIAL INFORMATION

   Item 1.    Financial Statements (Unaudited)

              Condensed Consolidated Balance Sheets - September 30, 2002 and
              December 31, 2001 (as restated)........................................................2

              Condensed Consolidated Statements of Income and Comprehensive Income -
              Three and Nine-Month Periods Ended September 30, 2002 and 2001 (as restated)...........3

              Condensed Consolidated Statement of Shareholder's Equity - Nine-Month Period
              Ended September 30, 2002 (as restated).................................................4

              Condensed Consolidated Statements of Cash Flows - Nine-Month Periods Ended
              September 30, 2002 and 2001 (as restated)..............................................5

              Notes to the Condensed Consolidated Financial Statements...............................6

   Item 2.    Management's Discussion and Analysis of Financial Condition and
              Results of Operations.................................................................16

   Item 3.    Quantitative and Qualitative Disclosures About Market Risk............................22

   Item 4.    Controls and Procedures...............................................................28

PART II.      OTHER INFORMATION

   Item 1.    Legal Proceedings.....................................................................29

   Item 6.    Exhibits and Reports on Form 8-K......................................................29

SIGNATURES..........................................................................................30

CERTIFICATIONS......................................................................................31
</TABLE>



<PAGE>
                  FACTORS AFFECTING FORWARD LOOKING STATEMENTS


         This Report contains "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 caption "Item 2 - Management's Discussion and Analysis of Financial
Condition and Results of Operations" pertaining to capital expenditures and
investments related to environmental compliance, strategic planning, purchasing
patterns of refined products and capital resources available to CITGO (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.

         Those forward looking statements are subject to risks and uncertainties
that could cause actual results to differ materially from the forward looking
statements. Those risks and uncertainties include changes in the availability
and cost of crude oil, feedstocks, blending components and refined products;
changes in prices or demand for CITGO products as a result of competitive
actions or economic factors; changes in environmental and other regulatory
requirements, which may affect operations, operating costs and capital
expenditure requirements; costs and uncertainties associated with technological
change and implementation; inflation; and continued access to capital markets
and commercial bank financing on favorable terms. In addition, CITGO purchases a
significant portion of its crude oil requirements from Petroleos de Venezuela,
S.A. ("PDVSA" which may also be used to refer to one or more of its
subsidiaries), its ultimate parent corporation, under long-term supply
agreements, and could be adversely affected by social, economic and political
conditions in Venezuela.

         Readers are cautioned not to place undue reliance on these forward
looking statements, which speak only as of the date of this Report. CITGO
undertakes no obligation to publicly release any revision to these forward
looking statements to reflect events or circumstances after the date of this
Report.




                                       1
<PAGE>
                         PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS (UNAUDITED)

CITGO PETROLEUM CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                             SEPTEMBER 30,     DECEMBER 31,
                                                                 2002             2001
                                                                              (AS RESTATED
                                                              (UNAUDITED)     - SEE NOTE 1)
                                                             ------------------------------
<S>                                                           <C>              <C>
ASSETS

CURRENT ASSETS:
  Cash and cash equivalents                                   $    24,273     $   104,362
  Accounts receivable, net                                      1,054,058         913,068
  Due from affiliates                                              72,692          64,923
  Inventories                                                   1,080,993       1,109,346
  Prepaid expenses and other                                       44,221          95,334
                                                              -----------     -----------
            Total current assets                                2,276,237       2,287,033

PROPERTY, PLANT AND EQUIPMENT - Net                             3,576,094       3,292,469

RESTRICTED CASH                                                    33,507            --

INVESTMENTS IN AFFILIATES                                         714,007         700,701

OTHER ASSETS                                                      267,012         228,906
                                                              -----------     -----------
                                                              $ 6,866,857     $ 6,509,109
                                                              ===========     ===========

LIABILITIES AND SHAREHOLDER'S EQUITY

CURRENT LIABILITIES:
  Short-term bank loans                                           119,000            --
  Accounts payable                                                686,405         616,854
  Payables to affiliates                                          500,640         265,517
  Taxes other than income                                         204,124         219,699
  Other                                                           249,232         300,484
  Current portion of long-term debt                               298,864         107,864
  Current portion of capital lease obligation                      21,503          20,358
                                                              -----------     -----------
            Total current liabilities                           2,079,768       1,530,776

LONG-TERM DEBT                                                    971,216       1,303,692

CAPITAL LEASE OBLIGATION                                           35,918          46,964

POSTRETIREMENT BENEFITS OTHER THAN PENSIONS                       240,376         218,706

OTHER NONCURRENT LIABILITIES                                      209,065         217,121

DEFERRED INCOME TAXES                                             791,477         767,338

MINORITY INTEREST                                                    --            23,176

COMMITMENTS AND CONTINGENCIES (Note 7)

SHAREHOLDER'S EQUITY:
  Common stock - $1.00 par value, 1,000 shares authorized,
    issued and outstanding                                              1               1
  Additional capital                                            1,659,698       1,659,698
  Retained earnings                                               882,725         745,102
  Accumulated other comprehensive loss                             (3,387)         (3,465)
                                                              -----------     -----------
            Total shareholder's equity                          2,539,037       2,401,336
                                                              -----------     -----------
                                                              $ 6,866,857     $ 6,509,109
                                                              ===========     ===========
</TABLE>

See notes to condensed consolidated financial statements


                                       2
<PAGE>
CITGO PETROLEUM CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (Unaudited)
(Dollars in Thousands)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                      THREE MONTHS                       NINE MONTHS
                                                                   ENDED SEPTEMBER 30,                ENDED SEPTEMBER 30,
                                                              ----------------------------      -----------------------------
                                                                  2002             2001              2002            2001
                                                                  ----             ----              ----            ----
                                                                              (AS RESTATED                       (AS RESTATED
                                                                              - SEE NOTE 1)                      - SEE NOTE 1)
                                                                              -------------                      -------------
<S>                                                          <C>               <C>              <C>             <C>
REVENUES:

  Net sales                                                   $ 5,342,794      $ 5,090,755      $ 13,698,780     $ 15,676,288
  Sales to affiliates                                              67,777           77,357           176,654          209,346
                                                              -----------      -----------      ------------     ------------
                                                                5,410,571        5,168,112        13,875,434       15,885,634
  Equity in earnings of affiliates                                 28,132           36,722            77,405           97,543
  Insurance recoveries                                             46,326             --             256,867             --
  Other expense - net                                             (11,492)         (17,510)          (26,002)         (18,648)
                                                              -----------      -----------      ------------     ------------
                                                                5,473,537        5,187,324        14,183,704       15,964,529
                                                              -----------      -----------      ------------     ------------

COST OF SALES AND EXPENSES:
  Cost of sales and operating expenses
     (including purchases of $2,103,726, $1,803,022,
     $4,989,436 and $5,280,280 from affiliates)                 5,298,606        4,979,758        13,694,391       15,027,993
  Selling, general and administrative expenses                     67,192           72,876           218,518          211,423
  Interest expense, excluding capital lease                        17,188           16,797            50,358           53,014
  Capital lease interest charge                                     1,615            2,157             5,402            6,970
  Minority interest                                                  --                957              --              1,028
                                                              -----------      -----------      ------------     ------------
                                                                5,384,601        5,072,545        13,968,669       15,300,428
                                                              -----------      -----------      ------------     ------------

INCOME BEFORE INCOME TAXES AND CUMULATIVE
   EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE                        88,936          114,779           215,035          664,101

INCOME TAXES                                                       32,016           42,613            77,412          242,066
                                                              -----------      -----------      ------------     ------------

INCOME BEFORE CUMULATIVE EFFECT OF
   CHANGE IN ACCOUNTING PRINCIPLE                                  56,920           72,166           137,623          422,035

CUMULATIVE EFFECT, ACCOUNTING FOR DERIVATIVES,
   NET OF RELATED INCOME TAXES OF $7,977                             --               --                --             13,600
                                                              -----------      -----------      ------------     ------------
NET INCOME                                                         56,920           72,166           137,623          435,635
                                                              -----------      -----------      ------------     ------------

OTHER COMPREHENSIVE INCOME (LOSS):
   Cash flow hedges:
      Cumulative effect, accounting for derivatives, net
         of related income taxes of $(850)                           --               --                --             (1,450)

      Less: reclassification adjustment for derivative losses
         included in net income, net of related income taxes
         of $43, $46, $130, and $230                                   77               78               232              392
                                                              -----------      -----------      ------------     ------------
                                                                       77               78               232           (1,058)

    Foreign currency translation loss, net of related
         income taxes of $(86)                                       (154)            --                (154)            --
                                                              -----------      -----------      ------------     ------------

OTHER COMPREHENSIVE INCOME (LOSS)                                     (77)              78                78           (1,058)
                                                              -----------      -----------      ------------     ------------

COMPREHENSIVE INCOME                                          $    56,843      $    72,244      $    137,701     $    434,577
                                                              ===========      ===========      ============     ============
</TABLE>

See notes to condensed consolidated financial statements


                                       3
<PAGE>
CITGO PETROLEUM CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDER'S EQUITY (Unaudited)
(Dollars and Shares in Thousands)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                                    ACCUMULATED
                                                                                                       OTHER
                                        COMMON STOCK           ADDITIONAL         RETAINED         COMPREHENSIVE
                                     SHARES      AMOUNT          CAPITAL          EARNINGS         (LOSS) INCOME        TOTAL
                                     ------      ------          -------          --------         -------------        -----

<S>                                    <C>        <C>          <C>                <C>                 <C>             <C>
BALANCE, DECEMBER 31, 2001              1         $ 1          $1,659,698         $ 745,102           $(3,465)        $2,401,336
    (As Restated - See Note 1)

Net income                             --          --                --             137,623              --              137,623

Other comprehensive income             --          --                --                --                  78                 78

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

BALANCE, SEPTEMBER 30, 2002             1         $ 1          $1,659,698         $ 882,725           $(3,387)        $2,539,037
                                      ===         ===          ==========         =========           =======         ==========
</TABLE>

See notes to condensed consolidated financial statements.





                                       4
<PAGE>
CITGO PETROLEUM CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(Dollars in Thousands)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                                     NINE MONTHS
                                                                                                  ENDED SEPTEMBER 30,
                                                                                              ---------------------------
                                                                                                 2002           2001
                                                                                                 ----           ----
                                                                                                            (AS RESTATED
                                                                                                            - SEE NOTE 1)
                                                                                                            -------------
<S>                                                                                           <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES (See Note 9)                                             $  482,402     $  456,930
                                                                                              ----------     ----------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Capital expenditures                                                                          (478,053)      (144,175)
  Proceeds from sales of property, plant and equipment                                               718          1,656
  Increase in restricted cash                                                                    (33,507)          --
  Investments in LYONDELL-CITGO Refining LP                                                      (28,700)       (19,900)
  Investments in and advances to other affiliates                                                (19,237)          (304)
                                                                                              ----------     ----------
            Net cash used in investing activities                                               (558,779)      (162,723)
                                                                                              ----------     ----------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Net proceeds from short-term bank loans                                                        119,000         26,500
  Net (repayments of) proceeds from revolving bank loans                                        (154,000)       103,350
  Proceeds from loans from affiliates                                                             37,000           --
  Proceeds from issuance of tax-exempt bonds                                                      62,501         25,000
  Payments on taxable bonds                                                                      (25,000)       (25,000)
  Payments of capital lease obligations                                                           (9,901)       (17,276)
  Payments of master shelf agreement notes                                                       (25,000)          --
  Repayments of other debt                                                                        (8,312)       (13,196)
  Dividends paid                                                                                    --         (383,900)
                                                                                              ----------     ----------
            Net cash used in financing activities                                                 (3,712)      (284,522)
                                                                                              ----------     ----------

(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS                                                 (80,089)         9,685

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                                                   104,362         19,038
                                                                                              ----------     ----------

CASH AND CASH EQUIVALENTS, END OF PERIOD                                                      $   24,273     $   28,723
                                                                                              ==========     ==========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
  Cash paid during the period for:
        Interest, net of $1,686 and $1,052 capitalized in 2002 and 2001                       $   48,077     $   56,608
                                                                                              ==========     ==========
        Income taxes, net of refunds of $51,381 in 2002                                       $  (45,293)    $  186,141
                                                                                              ==========     ==========
</TABLE>


See notes to condensed consolidated financial statements


                                       5
<PAGE>
CITGO PETROLEUM CORPORATION
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
THREE-MONTH AND NINE-MONTH PERIODS ENDED SEPTEMBER 30, 2002 AND 2001
--------------------------------------------------------------------------------

1.    BASIS OF PRESENTATION

      The financial information for CITGO Petroleum Corporation ("CITGO" or "the
      Company") subsequent to December 31, 2001 and with respect to the interim
      three-month and nine-month periods ended September 30, 2002 and 2001 (as
      restated) is unaudited. In the opinion of management, such interim
      information contains all adjustments, consisting only of normal recurring
      adjustments, necessary for a fair presentation of the results of such
      periods. The results of operations for the nine-month periods ended
      September 30, 2002 and 2001 (as restated) are not necessarily indicative
      of the results to be expected for the full year. Reference is made to
      CITGO's Annual Report for the fiscal year ended December 31, 2001 on Form
      10-K, dated March 28, 2002, for additional information.

      On January 1, 2002, PDV America, Inc. ("PDV America") the parent company
      of CITGO, made a contribution to the capital of CITGO of all of the common
      stock of PDV America's wholly owned subsidiary, VPHI Midwest, Inc.
      ("VPHI"). No additional shares of the capital stock of CITGO were issued
      in connection with the contribution. Effective January 1, 2002, the
      accounts of VPHI are included in the consolidated financial statements of
      CITGO at the historical carrying value of PDV America's investment in
      VPHI. CITGO recorded the effects of this transaction in a manner similar
      to "pooling-of-interests" accounting. The 2001 financial statements have
      been restated to reflect the Company's financial condition at December 31,
      2001 and the results of operations for the three-month and nine-month
      periods ended September 30, 2001 as if the transaction had occurred on
      January 1, 2001. The following unaudited proforma information presents the
      separate results of operations for CITGO and VPHI for the three months and
      nine months ended September 30, 2001:

<TABLE>
<CAPTION>
                                               THREE MONTHS               NINE MONTHS
                                                  ENDED                      ENDED
                                            SEPTEMBER 30, 2001        SEPTEMBER 30, 2001
                                            ------------------        ------------------
                                                         (000'S OMITTED)
<S>                                              <C>                      <C>
      Net Income CITGO                           $ 87,925                 $ 316,846
      Net (Loss) Income VPHI                      (15,759)                  118,789
                                                 --------                 ---------

      Net Income Consolidated                    $ 72,166                 $ 435,635
                                                 ========                 =========
</TABLE>

      The principal asset of VPHI is a petroleum refinery owned by its wholly
      owned subsidiary, PDV Midwest Refining, L.L.C. ("PDVMR"), located in
      Lemont, Illinois. CITGO has operated this refinery and purchased
      substantially all of its primary output, consisting of transportation
      fuels and petrochemicals, since 1997.

      The condensed consolidated financial statements include the accounts of
      CITGO and its wholly owned subsidiaries and Cit-Con Oil Corporation, which
      was 65% owned by CITGO through December 31, 2001 (collectively, "the
      Company"). On January 1, 2002, CITGO acquired the


                                       6
<PAGE>
      outstanding 35 percent interest in Cit-Con from Conoco, Inc. The principal
      asset of Cit-Con is a lubricants refinery in Lake Charles, Louisiana. This
      transaction did not have a material effect on the consolidated financial
      position or results of operations of the Company. The legal entity,
      Cit-Con Oil Corporation, was dissolved effective April 1, 2002.

      Certain reclassifications have been made to the September 30, 2001
      financial statements to conform to the classifications used for the
      periods ended September 30, 2002.


2.    CHANGE IN ACCOUNTING PRINCIPLE

      On January 1, 2001 the Company adopted Statement of Financial Accounting
      Standards No. 133, "Accounting for Derivative Instruments and Hedging
      Activities" ("SFAS No. 133"). The statement, as amended, 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. Under the transition provisions of SFAS No. 133, on January 1,
      2001 the Company recorded an after-tax, cumulative-effect-type transition
      benefit of $13.6 million (as restated - See Note 1) to net income related
      to derivatives that existed on that date and an after-tax,
      cumulative-effect-type transition charge of $1.5 million to accumulated
      other comprehensive income.


3.    INVENTORIES

      Inventories, primarily at LIFO, consist of the following:


<TABLE>
<CAPTION>
                                              SEPTEMBER 30,         DECEMBER 31,
                                                   2002                2001
                                               (UNAUDITED)         (AS RESTATED)
                                               -----------         -------------
                                                      (000's omitted)

<S>                                            <C>                  <C>
      Refined products                         $   836,085          $   836,683
      Crude oil                                    160,909              193,319
      Materials and supplies                        83,999               79,344
                                               -----------          -----------

                                               $ 1,080,993          $ 1,109,346
                                               ===========          ===========
</TABLE>


4.    SHORT-TERM BANK LOANS

      As of September 30, 2002, the Company had established $140 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. Maturity options vary up to 30 days.
      The Company had $119 million and $0 of borrowings outstanding under these
      facilities at September 30, 2002 and December 31, 2001, respectively.


                                       7
<PAGE>

5.    LONG-TERM DEBT AND FINANCING ARRANGEMENTS


<TABLE>
<CAPTION>
                                                                            SEPTEMBER 30,     DECEMBER 31,
                                                                                2002              2001
                                                                             (UNAUDITED)      (AS RESTATED)
                                                                            -------------     -------------
                                                                                    (000'S OMITTED)
<S>                                                                          <C>              <C>
      Revolving bank loans                                                   $   237,500      $   391,500

      Senior Notes, $200 million face amount, due 2006 with
         interest rate of 7.875%                                                 199,890          199,867

      Private Placement Senior Notes, due 2002 to 2006 with interest rate
        of 9.30%                                                                  56,819          56,819

      Master Shelf Agreement Senior Notes, due 2003 to
         2009 with interest rates from 7.17% to 8.94%                            235,000          260,000

      Tax Exempt Bonds, due 2004 to 2032 with variable
         and fixed interest rates                                                419,871          357,370

      Taxable Bonds, due 2026 to 2028 with variable interest rates               121,000          146,000
                                                                             -----------      -----------
                                                                               1,270,080        1,411,556
      Current portion of long-term debt                                         (298,864)        (107,864)
                                                                             -----------      -----------

                                                                             $   971,216      $ 1,303,692
                                                                             ===========      ===========
</TABLE>


      The Company's revolving bank loan agreements with various banks mature in
      May 2003 and consist of (i) a $400 million, five-year, revolving bank
      loan; (ii) a $150 million, 364-day, revolving bank loan; and (iii) a $25
      million, 364-day, revolving bank loan. The Company intends to replace the
      revolving bank loans when they mature.

      On March 20, 2002, CITGO issued $25 million of tax exempt revenue bonds
      due 2032. The proceeds were used to redeem $25 million of taxable Gulf
      Coast Environmental facilities revenue bonds due 2032.

      On May 3, 2002, CITGO issued $7.7 million of tax exempt environmental
      facilities revenue bonds due 2032. On June 28, 2002, CITGO issued $30
      million of tax exempt environmental facilities revenue bonds due 2032. The
      proceeds from both of these issuances will be used for capital projects at
      the Lemont refinery. Restricted cash of $34 million at September 30, 2002
      represents highly liquid investments held in trust accounts in accordance
      with these bond agreements. Funds are released solely for financing the
      qualified capital expenditures as defined in the bond agreements.

      The Company is preparing for a debt offering of up to $250 million from
      its remaining $400 million shelf registration with the Securities and
      Exchange Commission. Net proceeds to be received from the sale of the


                                       8
<PAGE>
      debt securities will be used for general corporate purposes, including
      capital expenditures and repayment of indebtedness.

6.    INVESTMENT IN LYONDELL-CITGO REFINING LP

      LYONDELL-CITGO Refining LP ("LYONDELL-CITGO") owns and operates a 265 MBPD
      refinery in Houston, Texas and is owned by subsidiaries of CITGO (41.25%)
      and Lyondell Chemical Company (58.75%) ("the Owners"). This refinery
      processes heavy crude oil supplied by PDVSA under a long-term supply
      contract that expires in 2017. CITGO purchases substantially all of the
      gasoline, diesel and jet fuel produced at the refinery under a long-term
      contract.

      On February 9, 2001, PDVSA notified LYONDELL-CITGO that effective February
      1, 2001, it had declared force majeure under the contract described above.
      Under a force majeure declaration, PDVSA may reduce the amount of crude
      oil that it would otherwise be required to supply under the agreement.
      When PDVSA reduces its delivery of crude oil under the crude oil supply
      contract, LYONDELL-CITGO may obtain alternative sources of crude oil which
      may result in increased crude costs. As of December 31, 2001, PDVSA
      deliveries of crude oil to LYONDELL-CITGO had not been reduced due to
      PDVSA's declaration of force majeure. On January 22, 2002, PDVSA notified
      LYONDELL-CITGO that pursuant to the February 9, 2001 declaration of force
      majeure, effective March 1, 2002, PDVSA expected to deliver approximately
      20 percent less than the contract volume. Deliveries remained
      approximately 20 percent less than contract volume through June 30, 2002.
      Beginning in July 2002, contract volumes delivered increased and
      deliveries are returning to contractual levels. PDVSA delivered
      approximately 95 percent of the contractual crude oil volume during the
      third quarter of 2002. In the nine months ended September 30, 2002, PDVSA
      delivered approximately 89 percent of the contractual crude oil volume.
      Crude oil was purchased in the market to replace the volume not delivered
      under the contract.

      CITGO has notes receivable from LYONDELL-CITGO which total $35 million at
      September 30, 2002 and December 31, 2001. The notes bear interest at
      market rates. Principal and interest are due July 1, 2003. The Company
      presently expects that the term of these notes will be extended as part of
      the total debt restructuring described below; accordingly, these notes are
      included in other assets in the accompanying consolidated balance sheets.


                                       9
<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
      which differ from participation interests. Cash distributions are
      allocated to the Owners based on participation interest. Information on
      CITGO's investment in LYONDELL-CITGO follows:

<TABLE>
<CAPTION>
                                                                       (000S OMITTED)
                                                            SEPTEMBER 30,          DECEMBER 31,
                                                                2002                   2001
                                                           --------------          ------------
                                                            (UNAUDITED)

<S>                                                           <C>                   <C>
      Carrying value of investment                            $ 512,630             $ 507,940
      Notes receivable                                           35,278                35,278
      Participation interest                                        41%                   41%

      Summary of LYONDELL-CITGO's financial position:
         Current assets                                       $ 258,000             $ 227,000
         Non current assets                                   1,400,000             1,434,000
         Current liabilities:
              Debt                                              463,000                50,000
              Loans from owners                                 265,000                     -
              Other                                             380,000               327,000
         Non current liabilities (including debt                 69,000               776,000
             of $0 and $450,000 at September 30,
             2002 and December 31, 2001,
             respectively)
         Members' equity                                        482,000               508,000


<CAPTION>
                                                              NINE MONTHS ENDED SEPTEMBER 30,
                                                           ------------------------------------
                                                                2002                   2001
                                                           --------------          ------------
                                                                        (UNAUDITED)
<S>                                                            <C>                   <C>
      Equity in net income                                  $    56,127           $    69,597
      Cash distribution received                                 80,137                92,683

      Summary of LYONDELL-CITGO's operating results:
         Revenue                                            $ 2,435,792           $ 2,691,753
         Gross profit                                           216,499               273,484
         Net income                                             153,969               185,822
</TABLE>


LYONDELL-CITGO's 18-month term loan and working capital revolver will mature in
January 2003. The Owners have engaged an underwriter and expect to replace these
two credit facilities prior to the existing maturity date.


                                       10
<PAGE>
7.    COMMITMENTS AND CONTINGENCIES

      LITIGATION AND INJURY CLAIMS - Various lawsuits and claims arising in the
      ordinary course of business are pending against the Company. The Company
      records 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 Company, and in amounts
      greater than the Company's accruals, then such determinations could have a
      material adverse effect on the Company's results of operations in a given
      reporting period. The most significant lawsuits and claims are discussed
      below.

      A class action lawsuit brought by four former marketers of the UNO-VEN
      Company ("UNO-VEN") in U.S. District Court in Wisconsin 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 has resulted in the judge
      granting the Company's motion for summary judgment. The plaintiffs are
      appealing the summary judgment. PDVMR and its parent, VPHI, jointly and
      severally, have agreed to indemnify UNO-VEN and certain other related
      entities against certain liabilities and claims, including this matter.

      A lawsuit is pending against PDVMR and CITGO in Illinois state court which
      claims damages as a result of PDVMR invoicing a partnership in which it is
      a partner, and an affiliate of the other partner of the partnership,
      allegedly excessive charges for electricity utilized by these entities'
      facilities located adjacent to the Lemont, Illinois refinery. The Company
      believes it will be able to resolve these claims for a non-material
      amount. The electricity supplier to the refinery is seeking recovery from
      the Company of alleged underpayments for electricity. The Company has
      denied all allegations and is pursuing its defenses.

      In May 1997, a fire occurred at CITGO's Corpus Christi refinery.
      Approximately seventeen related lawsuits were filed in federal and state
      courts in Corpus Christi, Texas against CITGO on behalf of approximately
      9,000 individuals alleging property damages, personal injury and punitive
      damages. In September 2002, CITGO reached an agreement to settle
      substantially all of the claims related to this incident for an amount
      that will not have a material financial impact on the Company.

      Litigation is pending in federal court in Lake Charles, Louisiana against
      CITGO by a number of current and former refinery employees and applicants
      asserting claims of racial discrimination in connection with CITGO's
      employment practices. A trial involving two plaintiffs resulted in
      verdicts for the Company. The Court granted the Company summary judgment
      with respect to another group of claims; these rulings have been affirmed
      by the Fifth Circuit Court of Appeals. Trials of the remaining cases are
      set to begin in December 2003. The Company does not expect that the
      ultimate resolution of these cases will have an adverse material effect
      on its financial condition or results of operations.

      CITGO is among refinery defendants to state and federal lawsuits in New
      York and a state action in Illinois alleging contamination of water
      supplies by methyl tertiary butyl ether ("MTBE"), a component of gasoline.
      Plaintiffs claim that MTBE is a defective product and that refiners failed
      to adequately warn customers and the public about risks associated with
      the use of MTBE in gasoline. These actions allege that MTBE poses public
      health risks and seek testing, damages and remediation of the alleged
      contamination. Plaintiffs filed putative class action lawsuits in federal
      courts in Illinois, California, Florida and New York. CITGO was named as a
      defendant in all but the California case. The federal cases were all
      consolidated in a Multidistrict Litigation case in the United States
      District Court for the Southern District of New York ("MDL 1358"). In July
      2002, the court in the MDL case denied plaintiffs' motion for class
      certification. In August 2002, a New York state court judge handling two
      separate but related individual MTBE lawsuits dismissed


                                       11
<PAGE>
      plaintiffs' product liability claims, leaving only traditional nuisance
      and trespass claims for leakage from underground storage tanks at gasoline
      stations near plaintiffs' water wells. The judge in the Illinois state
      court action is expected to hear plaintiffs' motion for class
      certification in that case sometime within the next year.

      In August 1999, the U.S. Department of Commerce rejected a petition filed
      by a group of independent oil producers to apply antidumping measures and
      countervailing duties against imports of crude oil from Venezuela, Iraq,
      Mexico and Saudi Arabia. The petitioners appealed this decision before the
      U.S. Court of International Trade based in New York, where the matter is
      still pending. On September 19, 2000, the Court of International Trade
      remanded the case to the Department of Commerce with instructions to
      reconsider its August 1999 decision. The Department of Commerce was
      required to make a revised decision as to whether or not to initiate an
      investigation within 60 days. The Department of Commerce appealed to the
      U.S. Court of Appeals for the Federal Circuit, which dismissed the appeal
      as premature on July 31, 2001. The Department of Commerce issued its
      revised decision, which again rejected the petition, in August 2001. The
      revised decision is awaiting review by the Court of International Trade.

      Approximately 310 lawsuits are currently pending against the Company in
      state and federal courts, primarily in Louisiana, Texas, and Illinois. The
      cases were brought by former employees and contractor employees seeking
      damages for asbestos related illnesses allegedly resulting from exposure
      at refineries owned or operated by the Company in Lake Charles, Louisiana,
      Corpus Christi, Texas and Lemont, Illinois. In many of these cases, there
      are multiple defendants. In some cases, the Company is indemnified by or
      has the right to seek indemnification for losses and expense that it may
      incur from prior owners of the refineries or employers of the claimants.
      The Company does not believe that the resolution of the cases will have an
      adverse material effect on its financial condition or results of
      operations.

      ENVIRONMENTAL COMPLIANCE AND REMEDIATION - CITGO is subject to various
      federal, state and local environmental laws and regulations which may
      require CITGO to take additional compliance actions and also actions to
      remediate the effects on the environment of prior disposal or release of
      petroleum, hazardous substances and other waste and/or pay for natural
      resource damages. Maintaining compliance with environmental laws and
      regulations could require significant capital expenditures and additional
      operating costs.

      CITGO's accounting policy establishes environmental reserves as probable
      site restoration and remediation obligations become reasonably capable of
      estimation. CITGO believes the amounts provided in its consolidated
      financial statements, as prescribed by generally accepted accounting
      principles, are adequate in light of probable and estimable liabilities
      and obligations. However, there can be no assurance that the actual
      amounts required to discharge alleged liabilities and obligations and to
      comply with applicable laws and regulations will not exceed amounts
      provided for or will not have a material adverse affect on its
      consolidated results of operations, financial condition and cash flows.

      In 1992, the Company reached an agreement with the Louisiana Department of
      Environmental Quality ("LDEQ") to cease usage of certain surface
      impoundments at the Lake Charles refinery by 1994. A mutually acceptable
      closure plan was filed with the LDEQ in 1993. The Company 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, the Company presented a proposal to
      the LDEQ revising the 1993 closure plan. In 1998 and 2000, the Company
      submitted further revisions as requested by the LDEQ. The LDEQ issued an
      administrative order in June 2002 that addressed the requirements and
      schedule for proceeding to

                                       12
<PAGE>
      develop and implement the corrective action or closure plan for these
      surface impoundments and related waste units. Compliance with the terms of
      the administrative order has begun.

      The Texas Natural Resources Conservation Commission ("TNRCC") conducted a
      multi-media investigation of the Corpus Christi Refinery during the second
      quarter of 2002 and has issued a Notice of Enforcement to the Company
      which identifies approximately 35 items of alleged violations of Texas
      environmental regulations. The Company anticipates that penalties will be
      proposed with respect to these matters, but no amounts have yet been
      specified.

      In June 1999, CITGO and numerous other industrial companies received
      notice from the U.S. EPA that the U.S. 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 U.S. EPA made a demand for
      payment of its past investigation costs from CITGO and other PRPs and is
      conducting 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, subsequent remedial actions and natural resource
      damages. CITGO disagrees with the U.S. EPA's allegations and intends to
      contest this matter.

      In January and July 2001, CITGO received Notices of Violation ("NOVs")
      from the U.S. EPA alleging violations of the Federal Clean Air Act. The
      NOVs are an outgrowth of an industry-wide and multi-industry U.S. EPA
      enforcement initiative alleging that many refineries and electric
      utilities modified air emission sources without obtaining permits under
      the New Source Review provisions of the Clean Air Act. The NOV's to CITGO
      followed inspections and formal Information Requests regarding the
      Company's Lake Charles, Louisiana and Corpus Christi, Texas refineries and
      the Lemont, Illinois refinery which at the time was operated by CITGO but
      not owned by CITGO. At the U.S. EPA's request, the Company is engaged in
      settlement discussions, but is prepared to contest the NOVs if settlement
      discussions fail. If the Company settles or is found to have violated the
      provisions cited in the NOVs, it would be subject to possible penalties
      and significant capital expenditures for installation or upgrading of
      pollution control equipment or technologies.

      In June 1999, a NOV was issued by the U.S. EPA alleging violations of the
      National Emission Standards for Hazardous Air Pollutants regulations
      covering benzene emissions from wastewater treatment operations at the
      Lemont, Illinois refinery operated by CITGO. CITGO is in settlement
      discussions with the U.S. EPA. The Company believes this matter will be
      consolidated with the matters described in the previous paragraph.

      In June 2002, a Consolidated Compliance Order and Notice of Potential
      Penalty was issued by the LDEQ alleging violations of the Louisiana air
      quality regulations at the Lake Charles, Louisiana refinery. CITGO is in
      settlement discussions with the LDEQ.

      Various regulatory authorities have the right to conduct, and from time to
      time do conduct, environmental compliance audits of the Company's and its
      subsidiaries' facilities and operations. Those audits have the potential
      to reveal matters that those authorities believe represent non-compliance
      in one or more respects with regulatory requirements and for which those
      authorities may seek corrective actions and/or penalties in an
      administrative or judicial proceeding. Based upon current information, the
      Company is not aware that any such audits or their findings have resulted
      in the filing of such a proceeding or is the subject of a threatened
      filing with respect to such a proceeding, nor does the Company believe
      that any such audit or their findings will have a material adverse effect
      on its future business and operating results, except for events otherwise
      described in its Annual Report on Form 10-K for the year ended December
      31, 2001 or in this Quarterly Report on Form 10-Q for the period ended
      September 30, 2002.

      Conditions which require additional expenditures may exist with respect to
      various Company sites including, but not limited to, CITGO's operating
      refinery complexes, former refinery sites, service stations and crude oil
      and petroleum product storage terminals. The amount of such future
      expenditures, if any, is indeterminable.

      DERIVATIVE COMMODITY AND FINANCIAL INSTRUMENTS - As of September 30, 2002
      the Company's petroleum commodity derivatives included exchange traded
      futures contracts, forward purchase and sale contracts, exchange traded
      and over-the-counter options and over-the-counter swaps. At September 30,
      2002, the balance sheet captions prepaid expenses and other current assets
      and other


                                       13
<PAGE>
     current liabilities include $26 million and $13 million, respectively,
     related to the fair values of open commodity derivatives.

     CITGO has also entered into various interest rate swaps to manage its risk
     related to interest rate changes on its debt. The fair value of the
     interest rate swap agreements in place at September 30, 2002, 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 a loss of $4 million, the offset of which is recorded in the balance
     sheet caption other current liabilities. In connection with the
     determination of fair market value, the Company considers the
     creditworthiness of the counterparties, but no adjustment was determined to
     be necessary as a result.


8.   RELATED PARTY TRANSACTIONS

      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. These crude oil supply
      agreements contain force majeure provisions which entitle PDVSA to reduce
      the quantity of crude oil and feedstocks delivered under the crude oil
      supply agreements under specified circumstances. On February 9, 2001,
      PDVSA notified CITGO that it had declared force majeure, effective
      February 1, 2001, under each of the long-term crude oil supply agreements
      it has with CITGO. Under a force majeure declaration, PDVSA may reduce the
      amount of crude oil that it would otherwise be required to supply under
      these agreements. When PDVSA reduces its delivery of crude oil under these
      crude oil supply agreements, CITGO may obtain alternative sources of crude
      oil which may result in increased crude costs or increase its purchases of
      refined products. During 2001, PDVSA deliveries of crude oil to CITGO were
      slightly less than contractual base volumes due to this declaration of
      force majeure. Therefore, the Company was required to obtain alternative
      sources of crude oil, which resulted in lower operating margins. On
      January 22, 2002, PDVSA notified CITGO that pursuant to the February 9,
      2001 declaration of force majeure, effective March 1, 2002, PDVSA expected
      to deliver approximately 20 percent less than the contract volume.
      Deliveries remained approximately 20 percent less than contract volume
      through June 30, 2002. Beginning in July 2002, contract volumes delivered
      increased and deliveries are returning to contractual levels. PDVSA
      delivered approximately 98 percent of the contractual crude oil volume
      during the third quarter of 2002. In the nine months ended September 30,
      2002, PDVSA delivered approximately 91 percent of the contractual crude
      oil volume. As a result, CITGO estimates that crude oil costs during the
      quarter ended September 30, 2002 were increased by $1 million and during
      the nine months ended September 30, 2002 were increased by $22 million.

     In August 2002, three affiliates entered into agreements to advance excess
     cash to CITGO from time to time under demand notes for amounts of up to a
     maximum of $10 million with PDV Texas, Inc. ("PDV Texas"), $30 million with
     PDV America and $10 million with PDV Holding, Inc. ("PDV Holding"). The
     notes bear interest at rates equivalent to 30-day LIBOR plus .875% payable
     quarterly. Amounts outstanding on these notes at September 30, 2002 were $5
     million, $28 million and $4 million from PDV Texas, PDV America and PDV
     Holding, respectively and are included in payables to affiliates in the
     accompanying consolidated balance sheet.


                                       14
<PAGE>
9.   INSURANCE RECOVERIES

     The insurance recoveries of $46 million included in the quarter ended
     September 30, 2002 and $257 million included in the nine-months ended
     September 30, 2002 relate primarily to a fire which occurred on August 14,
     2001 at the Lemont refinery. These recoveries are, in part, reimbursements
     for expenses incurred in 2002 to mitigate the effect of the fire on the
     Company's earnings. The Company received cash proceeds of $49 million
     during the quarter ended September 30, 2002 and $292 million during the
     nine months ended September 30, 2002, a portion of which were applied to
     receivables recorded during 2001. The Company expects to recover additional
     amounts related to this event subject to final settlement negotiations.




                                       15
<PAGE>
ITEM 2.  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 CITGO should be read in conjunction with the unaudited condensed
consolidated financial statements of CITGO included elsewhere herein. Reference
is made to CITGO's Annual Report for the fiscal year ended December 31, 2001 on
Form 10-K, dated March 28, 2002, for additional information and a description of
critical accounting policies and factors which may cause substantial
fluctuations in the earnings and cash flows of CITGO.

         On January 1, 2002, PDV America, the parent company of CITGO, made a
contribution to the capital of CITGO of all of the common stock of PDV America's
wholly owned subsidiary, VPHI. Effective January 1, 2002, the accounts of VPHI
are included in the consolidated financial statements of CITGO at the historical
carrying value of PDV America's investment in VPHI. (See Note 1 to the condensed
consolidated financial statements). In the following discussion and analysis of
financial condition and results of operations, 2001 data has been restated to
reflect the Company's financial condition and results of operations for the
three-month and nine-month periods ended September 30, 2001 as if the
transaction had occurred on January 1, 2001.

         In the quarter ended September 30, 2002, CITGO generated net income of
$56.9 million on total revenue of $5.5 billion compared to net income of $72.2
million on total revenue of $5.2 billion for the same period last year. In the
nine months ended September 30, 2002, CITGO generated net income of $137.6
million on total revenue of $14.2 billion compared to net income of $435.6
million on total revenue of $16.0 billion for the same period last year. (See
"Gross margin").







                                       16
<PAGE>
RESULTS OF OPERATIONS

         The following table summarizes the sources of CITGO's sales revenues
and sales volumes for the three-month and nine-month periods ended September 30,
2002 and 2001:


                        CITGO SALES REVENUES AND VOLUMES
<TABLE>
<CAPTION>

                                            THREE MONTHS             NINE MONTHS            THREE MONTHS          NINE MONTHS
                                        ENDED SEPTEMBER 30,      ENDED SEPTEMBER 30,     ENDED SEPTEMBER 30,  ENDED SEPTEMBER 30,
                                       --------------------------------------------- -------------------------------------------
                                           2002       2001       2002         2001        2002        2001     2002       2001
                                           ----       ----       ----         ----        ----        ----     ----       ----
                                                 (AS RESTATED)           (AS RESTATED)          (AS RESTATED)        (AS RESTATED)
                                                 -------------           -------------          -------------        -------------
                                                       ($ in millions)                             (gallons in millions)

<S>                                      <C>        <C>        <C>          <C>          <C>         <C>      <C>        <C>
Gasoline                                 $ 3,363    $ 3,069    $ 8,432      $ 9,282      4,056       3,717    11,014     10,239
Jet fuel                                     359        426        991        1,364        479         556     1,483      1,693
Diesel/#2 fuel                               899        999      2,439        3,192      1,232       1,353     3,724      4,074
Asphalt                                      245        192        468          378        353         365       707        710
Petrochemicals and industrial products       379        308      1,053        1,173        555         501     1,593      1,641
Lubricants and waxes                         143        156        422          451         67          74       195        216
                                       --------------------------------------------- -------------------------------------------
        Total refined product sales        5,388      5,150     13,805       15,840      6,742       6,566    18,716     18,573
Other sales                                   23         18         70           46
                                       --------------------------------------------- -------------------------------------------
        Total sales                      $ 5,411    $ 5,168   $ 13,875     $ 15,886      6,742       6,566    18,716     18,573
                                       ============================================= ===========================================
</TABLE>

                                       17
<PAGE>
         The following table summarizes CITGO's cost of sales and operating
expenses for the three-month and nine-month periods ended September 30, 2002 and
2001:

                   CITGO COST OF SALES AND OPERATING EXPENSES

<Table>
<Caption>
                                                                    THREE MONTHS               NINE MONTHS
                                                                 ENDED SEPTEMBER 30,        ENDED SEPTEMBER 30,
                                                              ------------------------    -----------------------
                                                                 2002          2001         2002          2001
                                                                 ----          ----         ----          ----
                                                                          (AS RESTATED)               (AS RESTATED)
                                                                   ($ in millions)            ($ in millions)

<S>                                                            <C>            <C>           <C>          <C>
Crude oil                                                      $ 1,641        $ 1,257       $ 3,827      $ 4,038
Refined products                                                 2,840          2,767         7,303        8,292
Intermediate feedstocks                                            352            400         1,104        1,157
Refining and manufacturing costs                                   314            269           900          851
Other operating costs, expenses and inventory changes              152            287           560          690
                                                              ------------------------    -----------------------
       Total cost of sales and operating expenses              $ 5,299        $ 4,980       $13,694      $15,028
                                                              ========================    =======================
</TABLE>


         Sales revenues and volumes. Sales increased $243 million, or
approximately 5%, in the three-month period ended September 30, 2002 as compared
to the same period in 2001. This was due to an increase in average sales price
of 2% and an increase in sales volume of 3%. Sales decreased $2 billion, or
approximately 13%, in the nine-month period ended September 30, 2002 as compared
to the same period in 2001. This was due to a decrease in average sales price of
13%. (See CITGO Sales Revenues and Volumes table above.)

         Equity in earnings of affiliates. Equity in earnings of affiliates
decreased by $9 million for the three-month period ended September 30, 2002 and
decreased by $20 million for the nine-month period ended September 30, 2002 as
compared to the same periods in 2001. The decrease for the three-month period
was primarily due to the change in the earnings of LYONDELL-CITGO, CITGO's share
of which decreased $12 million, from $30 million in the third quarter of 2001 to
$18 million in the third quarter of 2002. The decrease for the nine-month period
was primarily due to the decrease in the earnings of LYONDELL-CITGO and Nelson
Industrial Steam Company ("NISCO"). CITGO's share of LYONDELL-CITGO's earnings
decreased $14 million, from $70 million in the first nine months of 2001 to $56
million in the first nine months of 2002. CITGO's share of NISCO's earnings
decreased $11 million, from $8 million in the first nine months of 2001 to $(3)
million in the first nine months of 2002. The decrease in LYONDELL-CITGO's
earnings was primarily due to a reduction of contract crude supply and lower
margins on crude purchased in the spot market. The decrease in NISCO's earnings
was primarily related to a decrease in electricity rates from the prior year.

         Insurance recoveries. The insurance recoveries of $46 million included
in the three months ended September 30, 2002 and $257 million included in the
nine months ended September 30, 2002 relate primarily to a fire which occurred
on August 14, 2001 at the Lemont refinery. These recoveries are, in part,
reimbursements for expenses incurred in 2002 to mitigate the effect of the fire
on the Company's earnings. The Company expects to recover additional amounts
related to this event subject to final settlement negotiations.


                                       18
<PAGE>
         Cost of sales and operating expenses. Cost of sales and operating
expenses increased by $319 million or 6%, in the quarter ended September 30,
2002 as compared to the same period in 2001. Cost of sales and operating
expenses decreased by $1.3 billion or 9%, in the nine months ended September 30,
2002 as compared to the same period in 2001. (See CITGO Cost of Sales and
Operating Expenses table above.)

         CITGO purchases refined products to supplement the production from its
refineries to meet marketing demands and resolve logistical issues. Refined
product purchases represented 54% and 56% of total cost of sales and operating
expenses for the third quarters of 2002 and 2001, respectively and 53% and 55%
for the first nine months of 2002 and 2001, respectively. CITGO estimates that
margins on purchased products, on average, are lower than margins on produced
products due to the fact that CITGO can only receive the marketing portion of
the total margin received on the produced refined products. However, purchased
products are not segregated from CITGO produced products and margins may vary
due to market conditions and other factors beyond the Company's 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, CITGO does 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 CITGO which
impact the volume of refined products purchased. (See also "Factors Affecting
Forward Looking Statements".)

         Gross margin. The gross margin for the three-month period ended
September 30, 2002 was approximately 1.7 cents per gallon, compared to
approximately 2.9 cents per gallon for the same period in 2001. The gross margin
for the nine-month period ended September 30, 2002 was less than one cent per
gallon, compared to approximately 4.6 cents per gallon for the same period in
2001. In the three-month period ended September 30, 2002, the revenue per gallon
component increased approximately 2% while the cost per gallon component
increased approximately 4%. As a result, the gross margin decreased
approximately 1.2 cents on a per gallon basis in the quarter ended September 30,
2002 compared to the same period in 2001. In the nine-month period ended
September 30, 2002, the revenue per gallon component decreased approximately 13%
while the cost per gallon component decreased approximately 10%. As a result,
the gross margin decreased approximately 3.6 cents on a per gallon basis in the
nine months ended September 30, 2002 compared to the same period in 2001. The
gross margin is directly affected by changes in selling prices relative to
changes in costs. An increase or decrease in the price for crude oil, feedstocks
and blending products generally results in a corresponding increase or decrease
in prices for refined products. Generally, the effect of changes in crude oil
and feedstock prices on CITGO's consolidated operating results therefore depends
in part on how quickly refined product prices adjust to reflect these changes.
In the first nine months of 2002, there was a substantial decrease in refined
product sales prices without an equivalent decrease in costs resulting in a
significant negative impact on CITGO's gross margin and earnings.

         Selling, general and administrative expenses. Selling, general and
administrative expenses decreased from $73 million in the third quarter of 2001
to $67 million in the third quarter of 2002, or 8%. Selling, general and
administrative expenses increased from $211 million in the first nine months of
2001 to $219 million in the same period in 2002, or 4%. The decrease for the
quarter is primarily related to a decrease in incentive compensation. The
increase for the nine-month period is primarily related to sponsorship fees,
media fees and the start-up expenses related to international operations.


LIQUIDITY AND CAPITAL RESOURCES

         For the nine-month period ended September 30, 2002, the Company's
consolidated net cash provided by operating activities totaled approximately
$482 million.

                                       19
<PAGE>
Operating cash
flows were derived from net income of $138 million, depreciation and
amortization of $221 million and changes in operating assets and liabilities of
$124 million. The more significant changes in operating assets and liabilities
included the increase in accounts receivable, including receivables from
affiliates, of approximately $163 million, the decrease in prepaid expenses of
$87 million, the increase in income taxes payable of $68 million, and the
increase in accounts payable and other current liabilities, including payables
to affiliates, of approximately $112 million. Additionally, other long-term
assets, which mainly consist of costs of major refinery turnaround maintenance,
increased $89 million.

         Net cash used in investing activities totaled $559 million for the
nine-month period ended September 30, 2002 consisting primarily of capital
expenditures of $478 million (compared to $144 million for the same period in
2001), the increase of restricted cash of $34 million, and investments in
affiliates of $48 million. The capital expenditures during the nine-month period
of 2002 relate primarily to crude unit reconstruction at the Lemont refinery. On
August 14, 2001, a fire occurred at the crude distillation unit of the Lemont
refinery. The crude unit was destroyed and the refinery's other processing units
were temporarily taken out of production. The new crude unit was operational at
the end of May 2002.

         Net cash used in financing activities totaled $4 million for the
nine-month period ended September 30, 2002 consisting primarily of the payment
of $154 million on revolving bank loans, the payment of $25 million on master
shelf agreement notes, the payment of $25 million on taxable bonds, the payment
of capital lease obligations of $10 million and the net repayments of other debt
of $8 million. These payments are offset in part by $119 million in proceeds
from short term borrowings, $63 million in proceeds from tax exempt bonds, and
$37 million in proceeds from loans from affiliates.

         As of September 30, 2002, capital resources available to the Company
included cash generated by operations, available borrowing capacity under
CITGO's committed bank facilities of $287 million and $21 million of uncommitted
short-term borrowing facilities 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 Company is preparing for a debt offering of up to $250 million from
this shelf registration. CITGO management believes that the Company has
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 and other planned expenditures as they
arise. CITGO periodically evaluates other sources of capital in the marketplace
and anticipates that long-term capital requirements will be satisfied with
current capital resources and future financing arrangements, including the
issuance of debt securities. The Company's ability to obtain such financing will
depend on numerous factors, including market conditions and the perceived
creditworthiness of the Company at that time. (See also "Factors Affecting
Forward Looking Statements".)

         In April 2000, CITGO amended an agreement to sell trade accounts
receivable on an ongoing basis and without recourse. The amendment increased the
amount of such receivables that can be sold to $225 million. The amended
agreement expires in June 2003 and is renewable for successive annual terms by
mutual agreement.


                                       20
<PAGE>
         CITGO's senior unsecured debt ratings, as assessed by the three major
credit rating agencies, are as follows:

                    ---------------------------------------
                    | Fitch                      | BBB-   |
                    ---------------------------------------
                    | Moody's                    | Baa2   |
                    ---------------------------------------
                    | Standard & Poor's          | BB-    |
                    ---------------------------------------

CITGO's debt instruments do not contain any provisions which trigger
acceleration of payment or decreases in available borrowing capacity as a result
of changes in credit ratings.

         The Company is in compliance with its obligations under its debt
financing arrangements at September 30, 2002.


NEW ACCOUNTING STANDARDS

      In July 2001, the FASB issued Statement of Financial Accounting Standards
No. 142, "Goodwill and Other Intangible Assets" ("SFAS No. 142") which is fully
effective in fiscal years beginning after December 15, 2001, although certain
provisions of SFAS No. 142 were applicable to goodwill and other intangible
assets acquired in transactions completed after June 30, 2001. SFAS No. 142
addresses financial accounting and reporting for acquired goodwill and other
intangible assets and requires that goodwill and intangibles with an indefinite
life no longer be amortized but instead be periodically reviewed for impairment.
The adoption of SFAS No. 142 did not materially impact the Company's financial
position or results of operations.

      In June 2001, the FASB issued Statement of Financial Accounting Standards
No. 143, "Accounting for Asset Retirement Obligations" ("SFAS No. 143") which
addresses financial accounting and reporting for obligations associated with the
retirement of tangible long-lived assets and the associated asset retirement
costs. It applies to legal obligations associated with the retirement of
long-lived assets that result from the acquisition, construction, development
and (or) the normal operation of a long-lived asset, except for certain
obligations of lessees. This statement is effective for financial statements
issued for fiscal years beginning after June 15, 2002. The Company has not
determined the impact on its financial statements that may result from the
adoption of SFAS No. 143.

      In August 2001, the FASB issued Statement of Financial Accounting
Standards No. 144, "Accounting for the Impairment or Disposal of Long-Lived
Assets" ("SFAS No. 144") which addresses financial accounting and reporting for
the impairment or disposal of long-lived assets by requiring that one accounting
model be used for long-lived assets to be disposed of by sale, whether
previously held and used or newly acquired, and by broadening the presentation
of discontinued operations to include more disposal transactions. SFAS No. 144
is effective for financial statements issued for fiscal years beginning after
December 15, 2001, and interim periods within those fiscal years. The provisions
of this statement generally are to be applied prospectively; therefore, the
adoption of SFAS No. 144 did not impact the Company's financial position or
results of operations.


PROPOSED ACCOUNTING CHANGES

      The American Institute of Certified Public Accountants has issued a
"Statement of Position" exposure draft on cost capitalization that is expected
to require companies to expense the non-capital portion of major maintenance
costs as incurred. The statement is expected to require that any existing


                                       21
<PAGE>
deferred non-capital major maintenance costs be expensed immediately. This
statement also has provisions which will change the method of determining
depreciable lives. The impact on future depreciation expense is not determinable
at this time. The exposure draft indicates that this change will be required to
be adopted for fiscal years beginning after June 15, 2003, and that the effect
of expensing existing deferred major maintenance costs will be reported as a
cumulative effect of an accounting change in the consolidated statement of
income. At September 30, 2002, the Company had included turnaround costs of $136
million in other assets. Company management has not determined the amount, if
any, of these costs that could be capitalized under the provisions of the
exposure draft.

      In May 2002, the FASB issued an exposure draft of a proposed
interpretation, "Guarantor's Accounting and Disclosure Requirements for
Guarantees, Including Indirect Guarantees of Indebtedness of Others". This
proposed interpretation would elaborate on the disclosures made by a guarantor
in its financial statements about its obligations under certain guarantees that
it issued. It would also require a guarantor to recognize, at the inception of a
guarantee, a liability for the fair value of the obligations it has undertaken
in issuing the guarantee. The initial recognition and initial measurement
provisions of the proposed interpretation are expected to be applied only on a
prospective basis to guarantees issued or modified after December 31, 2002. The
disclosure requirements are expected to be effective for financial statements of
interim or annual periods ending after December 15, 2002.


ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         Introduction. CITGO has 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 Company operates and
finances its assets. CITGO does not attempt to manage the price risk related to
all of its inventories of crude oil and refined products. As a result, at
September 30, 2002, CITGO was exposed to the risk of broad market price declines
with respect to a substantial portion of its 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.




                                       22
<PAGE>
                  NON TRADING COMMODITY DERIVATIVES
                OPEN POSITIONS AT SEPTEMBER 30, 2002
<TABLE>
<CAPTION>

                                                                        MATURITY    CONTRACTED    CONTRACT        MARKET
      COMMODITY                          DERIVATIVE                       DATE        VOLUME        VALUE         VALUE
      ---------                          ----------                     --------    ----------    --------        ------
                                                                                                      ($ in millions)
                                                                                                  ------------------------
<S>                     <C>                                               <C>         <C>           <C>           <C>
No Lead Gasoline (1)    Futures Purchased                                 2002           50         $   1.7       $   1.7
                        Futures Sold                                      2002        2,902         $  99.4       $  98.1
                        Forward Purchase Contracts                        2002        5,901         $ 194.7       $ 204.6
                        Forward Sale Contracts                            2002        4,765         $ 159.8       $ 164.3

Distillates (1)         Futures Purchased                                 2002        2,253         $  72.8       $  76.6
                        Futures Purchased                                 2003          646         $  18.3       $  20.6
                        Futures Sold                                      2002          350         $  11.8       $  11.9
                        Futures Sold                                      2003          595         $  18.7       $  18.5
                        OTC Options Purchased                             2002           66         $     -       $   0.1
                        OTC Options Sold                                  2002           66         $     -       $  (0.1)
                        Forward Purchase Contracts                        2002          812         $  26.7       $  27.3
                        Forward Sale Contracts                            2002        1,255         $  42.6       $  42.8

Crude Oil (1)           Futures Purchased                                 2002        2,732         $  83.0       $  83.2
                        Futures Purchased                                 2003          595         $  16.5       $  16.5
                        Futures Sold                                      2002          377         $  10.0       $  11.3
                        Futures Sold                                      2003          475         $  11.6       $  13.5
                        Listed Options Purchased                          2002          300         $     -       $     -
                        Listed Options Sold                               2002          300         $     -       $     -
                        OTC Swaps (Pay Floating/Receive Fixed)(3)         2002        1,280         $     -       $  (0.4)
                        Forward Purchase Contracts                        2002        6,794         $ 178.1       $ 187.0
                        Forward Sale Contracts                            2002        4,149         $ 111.5       $ 116.1

Natural Gas (2)         Futures Sold                                      2002           40         $   1.6       $   1.7

Propane (1)             OTC Swaps (Pay Floating/Receive Fixed)(3)         2002          300         $     -       $  (0.8)
                        OTC Swaps (Pay Floating/Receive Fixed)(3)         2003          300         $     -       $  (0.8)
                        OTC Swaps (Pay Fixed/Receive Floating)(3)         2002           75         $     -       $   0.3
                        OTC Swaps (Pay Fixed/Receive Floating)(3)         2003           75         $     -       $   0.3
</Table>

------------------------
(1)   Thousands of barrels
(2)   Ten-thousands of mmbtu
(3)   Floating price based on market index designated in contract;  fixed price
      agreed upon at date of contract.


                                       23
<PAGE>
                        NON TRADING COMMODITY DERIVATIVES
                      OPEN POSITIONS AT SEPTEMBER 30, 2001
                                  (AS RESTATED)

<TABLE>
<CAPTION>
                                                                       MATURITY   CONTRACTED     CONTRACT     MARKET
      COMMODITY                           DERIVATIVE                     DATE       VOLUME        VALUE        VALUE
      ---------                           ----------                     ----       ------        -----        -----
                                                                                                   ($ in millions)
                                                                                                -----------------------
<S>                      <C>                                             <C>         <C>           <C>         <C>
No Lead Gasoline (1)     Futures Purchased                               2001          740         $  22.8     $  20.0
                         Futures Sold                                    2001          880         $  24.5     $  23.8
                         Forward Purchase Contracts                      2001        5,126         $ 149.4     $ 135.5
                         Forward Sale Contracts                          2001        3,856         $ 111.6     $ 100.9

Distillates (1)          Futures Purchased                               2001        1,483         $  45.6     $  42.1
                         Futures Purchased                               2002        1,184         $  35.7     $  33.0
                         Futures Purchased                               2003           12         $   0.3     $   0.3
                         Futures Sold                                    2001          959         $  30.5     $  27.0
                         Futures Sold                                    2002          600         $  18.7     $  16.8
                         OTC Options Purchased                           2001           10         $     -     $     -
                         OTC Options Sold                                2001           10         $     -     $     -
                         OTC Options Purchased                           2002           30         $     -     $     -
                         OTC Options Sold                                2002           30         $     -     $  (0.1)
                         OTC Swaps (Pay Fixed/Receive Floating)(3)       2001            1         $     -         $ -
                         Forward Purchase Contracts                      2001        1,298         $  38.5     $  38.0
                         Forward Sale Contracts                          2001        1,321         $  36.7     $  36.3
                         Forward Sale Contracts                          2002           25         $   0.8     $   0.7

Crude Oil (1)            Futures Purchased                               2001        1,512         $  41.9     $  35.5
                         Futures Purchased                               2002          600         $  15.8     $  14.3
                         Futures Sold                                    2001          579         $  15.7     $  13.5
                         Listed Options Purchased                        2001          694         $     -     $   0.6
                         Listed Options Sold                             2001        1,194         $     -     $   0.4
                         Forward Purchase Contracts                      2001        4,215         $ 114.1     $  98.6
                         Forward Sale Contracts                          2001        3,711         $ 100.5     $  86.7

Natural Gas (2)          Futures Sold                                    2001           30         $   0.8     $   0.8
                         Futures Sold                                    2002           20         $   0.6     $   0.6
                         OTC Options Purchased                           2001           60         $     -     $  (0.1)
                         OTC Options Sold                                2001           30         $     -     $  (0.5)
                         OTC Options Sold                                2001           11         $     -     $  (0.1)
</Table>
-------------------------
(1)   Thousands of barrels
(2)   Ten-thousands of mmbtu
(3)   Floating price based on market index designated in contract; fixed price
      agreed upon at date of contract.


                                       24
<PAGE>
         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 preferred mix of 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 September 30, 2002 and 2001,
CITGO's primary exposures were to LIBOR and floating rates on tax exempt bonds.

         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 SEPTEMBER 30, 2002 AND 2001

<TABLE>
<CAPTION>
                                                                                       NOTIONAL
                                           EXPIRATION              FIXED RATE          PRINCIPAL
           VARIABLE RATE INDEX                 DATE                    PAID              AMOUNT
           -------------------                 ----                    ----              ------
                                                                                     ($ in millions)
<S>                                        <C>                        <C>                <C>
           J.J. Kenny                      February 2005              5.30%              $ 12
           J.J. Kenny                      February 2005              5.27%                15
           J.J. Kenny                      February 2005              5.49%                15
                                                                                         ----
                                                                                         $ 42
                                                                                         ====
</TABLE>


         The fair value of the interest rate swap agreements in place at
September 30, 2002, 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 a loss of $4 million.






                                       25
<PAGE>
          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.

                                DEBT OBLIGATIONS
                              AT SEPTEMBER 30, 2002

<TABLE>
<CAPTION>
                                                                                    EXPECTED
                               FIXED        AVERAGE FIXED        VARIABLE        AVERAGE VARIABLE
  EXPECTED MATURITIES         RATE DEBT     INTEREST RATE        RATE DEBT        INTEREST RATE
  -------------------         ---------     -------------        ---------        -------------
                           ($ in millions)                    ($ in millions)
<S>                              <C>            <C>                <C>               <C>
          2002                   $ 11           9.30%              $ 119             3.07%
          2003                     61           8.79%                238             3.94%
          2004                     31           8.02%                 16             4.81%
          2005                     11           9.30%                  -                -
          2006                    252           8.06%                  -                -
       Thereafter                 183           7.90%                467             8.24%
                                -----           ----               -----             ----
         Total                  $ 549           8.14%              $ 840             6.23%
                                =====           ====               =====             ====

       Fair Value               $ 580                              $ 840
                                =====                              =====
</TABLE>



                                DEBT OBLIGATIONS
                              AT SEPTEMBER 30, 2001
                                  (AS RESTATED)

<TABLE>
<CAPTION>
                                                                                    EXPECTED
                               FIXED        AVERAGE FIXED        VARIABLE        AVERAGE VARIABLE
  EXPECTED MATURITIES         RATE DEBT     INTEREST RATE        RATE DEBT        INTEREST RATE
  -------------------         ---------     -------------        ---------        -------------
                           ($ in millions)                    ($ in millions)
<S>                              <C>            <C>                <C>               <C>
          2001                   $ 40           9.11%               $ 66             3.44%
          2002                     36           8.78%                 18             3.81%
          2003                     61           8.79%                 85             4.45%
          2004                     31           8.02%                 16             5.14%
          2005                     11           9.30%                  -                -
       Thereafter                 381           7.99%                485             8.14%
                                -----           ----               -----             ----
         Total                  $ 560           8.23%              $ 670             6.99%
                                =====           ====               =====             ====

       Fair Value               $ 592                              $ 670
                                =====                              =====
</TABLE>





                                       26
<PAGE>
ITEM 4.  CONTROLS AND PROCEDURES

         The certifying officers of the Company are responsible for establishing
and maintaining disclosure controls and procedures (as defined in Exchange Act
Rules 13a-14 and 15d-14) for the Company and have (i) designed such disclosure
controls and procedures to ensure that material information relating to the
Company, including its consolidated subsidiaries, is made known to them by
others within those entities, particularly during the period in which this
quarterly report is being prepared; and (ii) evaluated the effectiveness of the
Company's disclosure controls and procedures as of a date within 90 days prior
to the filing date of this quarterly report (the "Evaluation Date"). Based on
this evaluation, the chief executive officer and the chief financial officer of
the Company have concluded that the Company's disclosure controls and procedures
were effective during the quarter being reported on in this quarterly report.

         The Company's certifying officers have indicated that there were no
significant changes in internal controls or in other factors that could
significantly affect internal controls subsequent to the date of their most
recent evaluation, including any significant deficiencies or material weaknesses
that would require corrective actions.






                                       27
<PAGE>
                           PART II. OTHER INFORMATION


ITEM 1.  LEGAL PROCEEDINGS

      The required information is incorporated by reference into Part II of this
Report from Note 7 of the Notes to the Condensed Consolidated Financial
Statements included in Part I of this Report.





ITEM 6.       EXHIBITS AND REPORTS ON FORM 8-K



      (a)     Exhibits

                  Exhibit 99.1      Certificate Pursuant to Section 906 of the
                                    Sarbanes-Oxley Act of 2002.



      (b)     Reports on Form 8-K:

                     None.







                                       28
<PAGE>


                                   SIGNATURES



      Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.



                                         CITGO PETROLEUM CORPORATION





Date:   November 8, 2002                  /s/   Larry E. Krieg
     --------------------------           --------------------------------------
                                                Larry E. Krieg
                                          Controller (Chief Accounting Officer)




                                       29
<PAGE>
                                 CERTIFICATIONS

                             QUARTERLY CERTIFICATION
            PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002


I, Oswaldo Contreras, President and Chief Executive Officer of CITGO Petroleum
Corporation (the "Company"), certify that:

1.    I have reviewed this quarterly report on Form 10-Q for the quarter ended
      September 30, 2002 of the Company;

2.    Based on my knowledge, this quarterly report does not contain any untrue
      statement of a material fact or omit to state a material fact necessary to
      make the statements made, in light of the circumstances under which such
      statements were made, not misleading with respect to the period covered by
      the quarterly report;

3.    Based on my knowledge, the financial statements, and other financial
      information included in this quarterly report, fairly present in all
      material respects the financial condition, results of operations and cash
      flows of the Company as of, and for, the periods presented in this
      quarterly report;

4.    The Company's other certifying officer and I are responsible for
      establishing and maintaining disclosure controls and procedures (as
      defined in Exchange Act Rules 13a-14 and 15d-14) for the Company and we
      have:

      a) designed such disclosure controls and procedures to ensure that
      material information relating to the Company, including its consolidated
      subsidiaries, is made known to us by others within those entities,
      particularly during the period in which this quarterly report is being
      prepared;

      b) evaluated the effectiveness of the Company's disclosure controls and
      procedures as of a date within 90 days prior to the filing date of this
      quarterly report (the "Evaluation Date"); and

      c) presented in this quarterly report our conclusions about the
      effectiveness of the disclosure controls and procedures based on our
      evaluation as of the Evaluation Date;

5.    The Company's other certifying officer and I have disclosed, based on our
      most recent evaluation, to the Company's auditors and the audit committee
      of the Company's board of directors (or persons performing the equivalent
      function):

      a) all significant deficiencies in the design or operation of internal
      controls which could adversely affect the Company's ability to record,
      process, summarize and report financial data and have identified for the
      Company's auditors any material weaknesses in internal controls; and

      b) any fraud, whether or not material, that involves management or other
      employees who have a significant role in the Company's internal controls;
      and




                                       30
<PAGE>
6.    The Company's other certifying officer and I have indicated in this
      quarterly report whether or not there were significant changes in internal
      controls or in other factors that could significantly affect internal
      controls subsequent to the date of our most recent evaluation, including
      any corrective actions with regard to significant deficiencies and
      material weaknesses.



      Date:  November 7, 2002              /s/    Oswaldo Contreras
            ----------------------         ------------------------------------
                                           Name:  Oswaldo Contreras
                                           Title: Chief Executive Officer









                                       31
<PAGE>
                             QUARTERLY CERTIFICATION
            PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Eddie R. Humphrey, Chief Financial Officer of CITGO Petroleum Corporation
(the "Company"), certify that:

1.    I have reviewed this quarterly report on Form 10-Q for the quarter ended
      September 30, 2002 of the Company;

2.    Based on my knowledge, this quarterly report does not contain any untrue
      statement of a material fact or omit to state a material fact necessary to
      make the statements made, in light of the circumstances under which such
      statements were made, not misleading with respect to the period covered by
      the quarterly report;

3.    Based on my knowledge, the financial statements, and other financial
      information included in this quarterly report, fairly present in all
      material respects the financial condition, results of operations and cash
      flows of the Company as of, and for, the periods presented in this
      quarterly report;

4.    The Company's other certifying officer and I are responsible for
      establishing and maintaining disclosure controls and procedures (as
      defined in Exchange Act Rules 13a-14 and 15d-14) for the Company and we
      have:

      a) designed such disclosure controls and procedures to ensure that
      material information relating to the Company, including its consolidated
      subsidiaries, is made known to us by others within those entities,
      particularly during the period in which this quarterly report is being
      prepared;

      b) evaluated the effectiveness of the Company's disclosure controls and
      procedures as of a date within 90 days prior to the filing date of this
      quarterly report (the "Evaluation Date"); and

      c) presented in this quarterly report our conclusions about the
      effectiveness of the disclosure controls and procedures based on our
      evaluation as of the Evaluation Date;

5.    The Company's other certifying officer and I have disclosed, based on our
      most recent evaluation, to the Company's auditors and the audit committee
      of the Company's board of directors (or persons performing the equivalent
      function):

      a) all significant deficiencies in the design or operation of internal
      controls which could adversely affect the Company's ability to record,
      process, summarize and report financial data and have identified for the
      Company's auditors any material weaknesses in internal controls; and

      b) any fraud, whether or not material, that involves management or other
      employees who have a significant role in the Company's internal controls;
      and



                                       32
<PAGE>
6.    The Company's other certifying officer and I have indicated in this
      quarterly report whether or not there were significant changes in internal
      controls or in other factors that could significantly affect internal
      controls subsequent to the date of our most recent evaluation, including
      any corrective actions with regard to significant deficiencies and
      material weaknesses.



      Dated: November 7, 2002              /s/    Eddie R. Humphrey
            --------------------           ----------------------------------
                                           Name:  Eddie R. Humphrey
                                           Title: Chief Financial Officer






                                       33
<PAGE>



                                 EXHIBIT INDEX



         Exhibit 99.1         Certificate Pursuant to Section 906 of the
                              Sarbanes-Oxley Act of 2002.