• 4 minutes Is The Three Gorges Dam on the Brink of Collapse?
  • 8 minutes The Coal Industry May Never Recover From The Pandemic
  • 11 minutes China Raids Bank and Investor Accounts
  • 1 hour During March, April, May the states with the highest infections/deaths were NY, NJ, Ma. . . . . Today (June) the three have the best numbers. How ? Herd immunity ?
  • 5 hours In a Nutshell...
  • 15 hours Is OilPrice a cover for Green Propganda
  • 1 day Putin Paid Militants to Kill US Troops
  • 20 hours Victor Davis Hansen on Biden's mental acuity " . . unfit to serve". With 1 out of 5 Democrats admitting it. How many Dem's believe it but will not admit it?
  • 2 hours Putin Forever: Russians Given Money As Vote That Could Extend Putin's Rule Draws To A Close
  • 18 hours Tesla Model 3 police cars pay for themselves faster than expected, says police chief
  • 2 days Biden admits he has been tested for Cognitive Decline several times. Didn't show any proof of test results.
  • 2 hours Apology Accepted!
  • 4 hours Happy 4th of July!
  • 1 day The Political Genius of Donald Trump
  • 2 days Why Oil could hit $100
  • 2 days Per most popular Indian websites it was Indian troops not Chinese troops breach of LAC that caused the clashes. If you know any Indian media that claim to the contrary please provide the link
Iraq Set To Fall Short Of Ambitious OPEC+ Targets

Iraq Set To Fall Short Of Ambitious OPEC+ Targets

Iraq, OPEC’s no.2 oil producer…

How To Take Advantage Of The Energy Stock Selloff

How To Take Advantage Of The Energy Stock Selloff

Anything related to oil and…

Lithium Prices Are Set To Rally

Lithium Prices Are Set To Rally

The European Union’s green recovery…

Robert Rapier

Robert Rapier

More Info

Premium Content

Venezuela’s Key Refineries At Risk Of Seizure

In 2007, following Venezuela’s expropriation of billions of dollars of assets from U.S. companies like ExxonMobil and ConocoPhillips, I suggested a potential remedy.

Since Venezuela’s state-owned oil company, PDVSA (Petróleos de Venezuela, S.A.) owns the Citgo refineries in the U.S., the companies that had lost billions of dollars of assets should target these refineries for seizure as compensation.

These refineries have the same vulnerabilities as the U.S. assets in Venezuela that were seized. They represent infrastructure on the ground that can’t be removed from the country.

Citgo has three major refining complexes in the U.S. with a total refining capacity of 750,000 barrels per day. Recognizing the vulnerability from asset seizure, PDVSA tried to sell these assets in 2014, and valued them at $10 billion. That value may be grossly overstated, considering that Venezuela subsequently pledged 49.9 percent of Citgo to Russian oil giant Rosneft as collateral for a $1.5 billion loan.

In recent years, PDVSA has lost a series of arbitration awards related to expropriations, and companies have been looking for opportunities to collect. In May, ConocoPhillips seized some PDVSA assets in the Caribbean to partially enforce a $2 billion arbitration award for Venezuela’s 2007 expropriation.

Related: Indonesia’s Oil Sector In Jeopardy As Elections Loom

ConocoPhillips had sought up to $22 billion — the largest claim against PDVSA — for the broken contracts from its Hamaca and Petrozuata oil projects. The company is pursuing a separate arbitration case against Venezuela before the World Bank’s International Centre for Settlement of Investment Disputes (ICSID). The ICSID has already declared Venezuela’s takeover unlawful, opening the way for another multi-billion dollar settlement award.

Last week, a court ruling has opened the door for Citgo assets to be seized to pay for these judgments.

Defunct Canadian gold miner Crystallex had been awarded a $1.4 billion judgment over Venezuela’s 2008 nationalization of a Crystallex gold mining operation in the country. A U.S. federal judge ruled that a creditor could seize Citgo’s assets to enforce this award.

This ruling is sure to set off a feeding frenzy among those that have won arbitration rulings against Venezuela. Until the legal rulings are settled, it’s hard to say which companies will end up with Citgo’s assets. But it’s looking far more likely it won’t be PDVSA.

By Robert Rapier

More Top Reads From Oilprice.com:


Download The Free Oilprice App Today

Back to homepage





Leave a comment
  • Captain America on August 19 2018 said:
    VIVA La Revolucion.....NOT !
  • Danny Hangartner on August 19 2018 said:
    Holy smoke! Venezuela needs to do more out of country investing!

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News