U.S. officials and lawmakers have recently met with Venezuelan opposition politicians and supervisors of state-owned refiner Citgo Petroleum, as Venezuela seeks to pause an ongoing court-ordered auction of shares, sources close to the discussions have told Reuters.
The sale process of shares to pay creditors and claimants against Venezuela’s oil asset appropriation and debts owed by Citgo was launched by a Delaware court in October 2023.
A first bidding round ended earlier this year, and a second bidding round was expected to close earlier this week.
Overall, creditors and claimants have sought to recoup at courts in Delaware a total of $24 billion in claims and arbitration awards against Venezuela.
Citgo is the seventh-largest refiner in the United States with a total capacity topping 800,000 barrels per day (bpd). It has plants in Texas, Louisiana, and Illinois, along with pipelines and a gasoline distribution network that supplies 4,200 outlets in the United States.
First in line in the court-ordered auction was Canadian Crystallex. The miner was the first company to make a claim against Venezuela’s state oil firm PDVSA after Venezuela nationalized a gold mine it operated in the country. An arbitration court awarded Crystallex $1.4 billion in damages several years ago and the company agreed to the sum.
U.S. oil and gas company ConocoPhillips is also near the front of the line to recoup costs associated with Venezuela’s expropriation of two of its crude oil projects.
However, in the first round of the auction the highest bid was only $7.3 billion, which is just one-third of the value of the claims approved by the court, Reuters reported in March this year.
The lower-than-expected initial bids have prompted Venezuela to propose an alternative payment schedule to creditors, with higher payouts over several years while Caracas would retain some stake in the company.
According to Reuters, Venezuelan representatives are now seeking a pause in the court-ordered auction at least until the outcome of the presidential election in Venezuela in late July is known.
By Tsvetana Paraskova for Oilprice.com
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Publish date : 2024-06-05 10:30:00
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