Bloomberg – Venezuela's opposition-led PDVSA board said it was open to talks with creditors of U.S. refiner Citgo ahead of an auction to settle claims against the government and its oil company.
“The risk of losing Citgo is real,” the board said in a statement late Tuesday after the U.S. Supreme Court rejected an appeal by the Venezuelan government to limit the number of creditors who could participate in the auction . Venezuela's state oil company's bonds due in 2020 rose on the news.
“The board remains open to constructive discussions and dialogue with creditors to reach negotiated agreements,” the statement said.
Citgo, the country's most valuable foreign asset, was protected by U.S. sanctions against Venezuela This prevented creditors from taking over the refinery. But a U.S. judge last year ordered the start of the process to sell its parent company, PDV Holding Inc., after Washington signaled it would not stand in the way.
U.S. District Judge Leonard Stark, who is overseeing the Citgo sale process, has set a timeline that requires creditors to complete the steps to be eligible to bid by Jan. 12 a first round of offers for January 22nd. A second round should be determined. The final hearing to approve the sale is tentatively scheduled for July 15.
The court must consider any possible solution or agreement, Judge Stark said earlier this week.
Due to strained relations between the United States and Venezuela's socialist President Nicolás Maduro, PDVH is controlled by the Venezuelan opposition, while PDVSA remains in the hands of the Caracas government. The United States recently lifted sanctions on Venezuela's oil industry but continues to monitor agreements reached with Maduro and could withdraw the sanctions if they are not implemented, Washington said.
Crystallex International Corp., a Canadian mining company whose rights to the Las Cristinas gold field were seized by then-President Hugo Chávez, is the first company to receive a significant portion of the auction funds. A World Bank arbitration panel found in 2016 that Venezuela owed Crystallex $1.4 billion. Venezuela has paid a portion, but Crystallex is still trying to get back about $1 billion.
A Crystallex representative did not immediately respond to requests for comment.
Other foreign companies expelled from Venezuela include Siemens AG, ConocoPhillips and Exxon Mobil Corp. Two of Exxon's oil projects were expropriated in 2007, and the company is now claiming $984 million.
More than 20 plaintiffs have sought damages, bringing the total claim to about $20 billion.
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