How a 1980s corporate takeover battle birthed a modern energy giant

Cultures · Published 10 October 2026 Swipe more like this →

In short: Before it was a centerpiece of international sanctions, CITGO was the subject of a legendary 'Pac-Man defense.' Discover how a hostile bid from Mesa Petroleum led to a rare counter-attack, a massive acquisition by Occidental Petroleum, and the eventual creation of the Houston-based refiner we know today.

The modern identity of CITGO Petroleum Corporation emerged from a period of intense corporate warfare in the early 1980s. T. Boone Pickens headed Mesa Petroleum when it initiated an aggressive takeover bid in 1981. The target of this move was Cities Service. In a rare and aggressive maneuver known as a 'Pac-Man defense,' Cities Service attempted to turn the tables by making a counteroffer to acquire its attacker, Mesa. While this high-stakes battle eventually ended in mid-1982 with both sides abandoning their bids, the struggle left Cities Service vulnerable. An offer from Occidental Petroleum worth $4 billion was taken by the firm later in that same year.

Following the takeover, Occidental Petroleum restructured the company's assets. By 1982, it separated the downstream operations—including refining, marketing, and transportation—into a new subsidiary. This entity, which became CITGO, focused on processing Venezuelan crude oil. The company's refining footprint includes three major U.S. Refineries are maintained in Lemont, Illinois; Corpus Christi, Texas; and Lake Charles, Louisiana. The Lake Charles refinery, in particular, has deep historical roots, having been built during World War II to produce high-octane aviation gasoline for Allied bombers.

The company's lineage stretches back much further than the 1980s. It traces its origins to 1910, when entrepreneur Henry L. Doherty founded the Cities Service Gas Development Company to provide gas and electricity to municipalities. Over the decades, the company evolved from a utility provider into an integrated oil giant. The 1935 Public Utility Holding Company Act sped up this shift, requiring the firm to pick between its petroleum and utility assets. Cities Service ultimately chose to focus on oil and gas, a path that eventually led to the 1965 adoption of the 'CITGO' name—a portmanteau of 'Cities' and 'go'—for its retail stations.

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