The Citgo Petroleum Corporation headquarters are pictured in Houston, Texas, U.S., February 19, 2019. REUTERS/Loren Elliott
HOUSTON: The US will not block a court auction of shares in oil refiner Citgo Petroleum Corp’s parent, Justice Department officials told a federal court, paving the way for a potential seizure by creditors of Venezuela’s most-prized foreign asset.
Since 2020, the US Treasury Department 2020 has protected Citgo from creditors with claims against Venezuela, and its change of heart will allow claims to be settled by negotiation or through an auction of shares in Citgo parent PDV Holding. Citgo is PDV Holding’s only asset.
Houston-based Citgo is the seventh-largest US oil refiner. It has plants in Louisiana, Illinois and Texas, as well as energy pipelines and a petrol distribution network supplying 4,200 outlets in the eastern half of the United States.
It reported a record US$2.8bil (RM12.5bil) profit last year and could be valued at US$13bil (RM57.9bil).
A Citgo spokesperson declined to comment.
The Treasury, which has blocked transactions involving Venezuela’s US assets, “will not take enforcement action” to halt the auction or a negotiated settlement, the Justice Department wrote in a letter filed last Friday in US District Court in Delaware. The Treasury would have to issue a licence to complete any sale.
Robert Pincus, a court-appointed official who met with the Justice Department and Treasury, urged the court to move quickly “to take advantage of Citgo’s recent financial and operational performance and the current state of the refining industry.”
Canadian miner Crystallex International has a US$970mil (RM4.3bil) claim against PDV Holding that spawned the proposed court auction.
A representative for Crystallex declined to comment.
Other creditors with at least US$2.6bil (RM11.6bil) in claims against Venezuela have received conditional approvals to join the case.
Pincus proposed starting the sales process on Sept 5 with the highest bid reviewed by the court in June 2024.
The court has retained investment banker Evercore to assess market demand and conduct the sale. — Reuters
