• 5 minutes Desperate Call or... Erdogan Says Turkey Will Boycott U.S. Electronics
  • 11 minutes Saudi Fund Wants to Take Tesla Private?
  • 17 minutes Starvation, horror in Venezuela
  • 3 hours Mike Shellman's musings on "Cartoon of the Week"
  • 9 mins WTI @ 67.50, charts show $62.50 next
  • 2 hours Newspaper Editorials Across U.S. Rebuke Trump For Attacks On Press
  • 47 mins WTI @ 69.33 headed for $70s - $80s end of August
  • 2 hours Venezuela set to raise gasoline prices to international levels.
  • 3 hours Renewable Energy Could "Effectively Be Free" by 2030
  • 3 hours Scottish Battery ‘Breakthrough’ Could Charge Electric Cars In Seconds
  • 2 hours Corporations Are Buying More Renewables Than Ever
  • 9 hours Batteries Could Be a Small Dotcom-Style Bubble
  • 17 hours California Solar Mandate Based on False Facts
  • 17 hours Oil prices---Tug of War: Sanctions vs. Trade War
  • 7 hours Don't Expect Too Much: Despite a Soaring Economy, America's Annual Pay Increase Isn't Budging
  • 7 hours Again Google: Brazil May Probe Google Over Its Cell Phone System
What Would A Hard Brexit Mean For British Oil?

What Would A Hard Brexit Mean For British Oil?

Despite nearly 14 months of…

Oil Prices Take A Breather As Supply Jumps

Oil Prices Take A Breather As Supply Jumps

Oil markets took a breather…

Crystallex Wins Right To Tap Citgo For Compensation

Citgo

Canadian gold miner Crystallex was ruled the winner in a long-running case against Venezuela, which it has sued for the forced nationalization of its assets by the Hugo Chavez government. A U.S. federal judge this week awarded the miner the right to approach Venezuela’s U.S. oil unit, Citgo, to seek its compensation of US$1.4 billion.

The Associated Press notes the ruling by Chief Judge Leonard P. Stark is unique: government assets such as Citgo’s parent, PDVSA, are as a rule protected from lawsuits targeting a state. Yet in Stark’s ruling, the judge said that Venezuela had blurred the lines between the government and the state oil firm, with a military official at the helm of PDVSA.

There is no reason to believe Crystallex will not seek to enforce the ruling as soon as possible after a decade-old legal battle. Should this happen, PDVSA, according to AP, might have to liquidate Citgo to get funds for the settlement. The company is worth a lot more than US$1.4 billion—it is valued at around US$8 billion—but cash-strapped Caracas does not have a lot of funding sources at the moment.

The judge has delayed the enforcing of the ruling for a week, possibly to give Crystallex and Caracas time to try and reach a payment agreement.

What could make matters worse for Venezuela is the fact that Crystallex is by far not the only company seeking compensation for the nationalization of its business in the country, and now more of those rulings could follow. ConocoPhillips is another one: the company earlier this year won a court order allowing it to seize PDVSA assets in the Caribbean as a way of getting US$2.04 billion in compensation for the nationalization of two projects by the Chavez government.

AP also quoted a broker from Caracas Capital Markets as saying bondholders could follow suit demanding their money, too. Bondholders are owed US$65 billion in bonds that Caracas stopped servicing a year ago.

"This was the most vulnerable low hanging fruit for debtholders to go after. It looks like Crystallex is the lucky lottery winner because they got there first," Russ Dallen said.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage

Leave a comment
  • Johnny on August 11 2018 said:
    Yesterday Conoco won the right to appropriate 1 million bbl/day of Venezuelan oil headed to Gulf refineries. Maduro can hang up his sword and shield. Everything he pumps belongs to Conoco.
  • Dr Francis Manns on August 10 2018 said:
    In the meantime, over many years, artisanal miners have used mercury amalgamation to recover gold that Placer would have recovered properly, efficiently and profitably providing tax revenues to one of the more politically abused countries in the world. This is just another example of the stupidity of the Venezuelan socialist ideal.

Leave a comment

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