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By Jason Szep

BOSTON, Jan 7 (Reuters) - Venezuela-owned Citgo Petroleum Corp said on Wednesday it would resume a controversial program of delivering free home-heating oil for the U.S. poor, two days after indicating the program would be scrapped this year.

A Houston unit of a state-owned company backed by Venezuelan President Hugo Chavez will supply 100 gallons of free oil to eligible households in 23 states with a target of about 200,000 homes.

"This decision is the result of a strong commitment and a big effort on the part of Citgo and our shareholder in light of the current global financial crisis and its impact on the oil industry in general," Citgo Chairman and Chief Executive Alejandro Granado told a news conference.

The donations by Citgo Petroleum Corp, owned by Venezuelan state-owned Petroleos de Venezuela, began in 2005 at discounted prices before being expanded in 2006 to include free oil. They were worth $100 million last year.

Citizens Energy, a nonprofit distributor of the oil, said two days ago that Venezuela had suspended the program, citing the world financial crisis and slide in energy markets.

Explaining the reversal, Citgo and Citizens Energy said the Andean nation had been forced to evaluate all its social programs, including the heating initiative.

The news came as an ice storm swept parts of the U.S. Northeast and many Americans grappled with winter heating bills.