• 3 minutes The GREAT OPEC+ Agreement
  • 6 minutes US Shale Resilience: Oil Industry Experts Say Shale Will Rise Again
  • 10 minutes Trumps Oil Industry....
  • 13 mintues Why Trump Is Right to Re-Open the Economy
  • 10 mins "Saudi Armada heading to U.S.", "Dumping" is a WTO VIOLATION.
  • 10 hours A small trial finds that hydroxychloroquine is not effective for treating coronavirus
  • 4 hours Ten days ago Trump sent New York Hydroxychloroquine. Being administered to infected. Covid deaths dropped last few days. Fewer on ventilators. Hydroxychloroquine "Cause and Effect" ?
  • 7 hours Trump will be holding back funds that were going to W.H.O. Good move
  • 5 hours Did you all forget the "drill baby drill" republican motto and trump calling for ramping up oil production a cpl years ago ?
  • 11 hours Chinese Communist Party
  • 5 hours Bernie Sanders introduces bill to ban fracking
  • 21 hours Saudi Arabia Is Buying Up European Oil Majors
  • 19 mins China to face backlash. Japanese government to fund moving Japanese mfg companies out of China. Is this the beginning ?
  • 16 hours Corona Price Tag
  • 20 hours Russia's Rosneft Oil is screwed if they have to shut down production as a result of glut.
  • 8 hours Saudis ship 13 mm bbls oil to U.S. to hurt U.S. shale. On its way. . . . . . . AND TRUMP DOES NOTHING. .
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