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Just a few days after the U.S. Department of Treasury said it will not allow anyone to claim the assets of refiner Citgo as compensation for damages suffered from its parent PDVSA, ConocoPhillips has filed a claim that seeks to do just that.
Reuters reports that the supermajor filed a motion with a court in Delaware to gain access to shares in Citgo as a way to enforce an arbitration award another court granted it against Venezuela’s PDVSA.
The International Chamber of Commerce ruled that Conoco was due $2 billion in compensation for the nationalization of its assets in Venezuela by Nicolas Maduro’s predecessor, Hugo Chaves, and since then, the U.S. company has been looking for ways to get what is due to it.
Last year, Conoco seized the assets of PDVSA in the Caribbean, after obtaining two court orders to use these assets to enforce the ICC’s ruling. Several months later, however, Conoco and PDVSA reached an agreement on the compensation due and the supermajor released the Caribbean assets. Now, it seems the agreement has fallen through, but getting its hands on Citgo shares will be difficult for Conoco.
Last week, the Department of Treasury blocked any attempts by PDVSA compensation claimants and creditors to get their hands on the Venezuelan company’s U.S. subsidiary, banning all moves to “transfer or otherwise alter or affect property.”
The Treasury allowed for exceptions, but said these will be only granted to parties that had a special license.
Conoco noted in its filing that seizing Citgo assets would not be an easy task, Reuters reports, citing the company as saying “The ability of any creditor to foreclose on the PDVH Shares ... may turn on the status and interpretation of sanctions, authorizations and/or licensing from the Office of Foreign Assets Control of the U.S. Department of the Treasury.”
Meanwhile, half of Citgo’s shares have been used as collateral for a loan PDVSA received from Rosneft, and the other half is collateral for a bond that matures in 2020.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.