Bloomberg – The board of Venezuelan opposition-led PDVSA said it is open to talks with creditors of U.S. refiner Citgo before an auction to settle claims against the government and its oil company.
“The risk of loss for Citgo is real,” the board said in a statement issued late Tuesday, after the U.S. Supreme Court refused to accept an appeal from the Venezuelan government to limit the number of creditors who can participate in the auction. Venezuelan state oil company bonds due in 2020 rose on this news.
“The Board of Directors 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 US sanctions against Venezuela Which prevented creditors from seizing the refinery. But a U.S. judge ordered the sale of its parent company, PDV Holding Inc., to begin last year after Washington signaled it would not stand in the way.
U.S. Circuit Judge Leonard Stark, who is overseeing the Citgo sale, has set a timeline that includes creditors completing steps to be eligible to bid by January 12, and The first round of screenings is on January 22. The second round is scheduled to be determined. The final hearing to approve the sale is tentatively scheduled for July 15.
Judge Stark said earlier this week that the court would have to review any potential decision or agreement.
Due to tense relations between the United States and Venezuelan socialist President Nicolas Maduro, PDVH is controlled by the Venezuelan opposition, while PDVSA remains in the hands of the Caracas government. Washington said the United States recently lifted sanctions on Venezuela's oil industry, but it is still monitoring agreements reached with Maduro and may withdraw sanctions if they are not implemented.
Crystallex International Corp., a Canadian mining company whose rights to the Las Cristinas gold field were expropriated by then-President Hugo Chavez, is the first company to receive a significant portion of the auction money. A World Bank arbitration panel decided in 2016 that Venezuela owed Crystallex $1.4 billion. Venezuela has paid part of the amount, but Crystallex is still trying to recover 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. A pair of Exxon's oil projects were seized in 2007, and the company now has claims worth $984 million.
More than 20 plaintiffs sought compensation, bringing the total claims to about $20 billion.
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