ConocoPhillips Bids for Pieces of Citgo With Claims, Not Cash

ConocoPhillips-the largest Citgo creditor thanks to Venezuela's $12 billion appropriation of Conoco's assets-has made a bid in the U.S. court auction that is determining the fate of Venezuela-owned Citgo Petroleum.

But ConocoPhillips submitted a credit bid using its claims in lieu of cash, people familiar with the process told Reuters on Friday.

Conoco isn't the only company to attempt to apply their claims towards bids, a court officer overseeing the auction told Reuters. If approved, this turn of events would reduce the pot of cash available to be distributed among the remaining creditors-creditors that are trying to get just a piece of the $21 billion in debt that Venezuela owes.

The bidding round was open until January 22, and all bids have been submitted.

While other companies may be trying to use their claims instead of cash to bid, ConocoPhillips is the largest creditor, and a court approval of such a lofty bid using claims could leave scant cash available to the other companies due money from the auction.

The sale process was launched by a Delaware court in October 2023. As the bidding round is drawing to a close, dozens of energy firms and investment banks have lately rushed to obtain financial data on Citgo and its parent company. The bidding round is for creditors and claimants against Venezuela's oil asset appropriation and debts owed by Venezuela's U.S.-based refiner Citgo.

Citgo is the seventh-largest refiner in the United States with a total capacity topping 800,000 barrels daily. 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.

The first in line to receive funds from the auction will be Canadian Crystallex, who is owed $1.4 billion and submitted the first claim against PDVSA after Venezuela nationalized its gold mine in the country. 

By Julianne Geiger for Oilprice.com

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