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Venezuela’s state oil major PDVSA has valued its U.S.-based downstream subsidiary Citgo at between $32 and $40 billion, Reuters has reported, citing a court hearing.
The hearing precedes a planned share sale for Citgo in a bid to settle its massive debt load, estimated at some $23 billion.
Some 21 creditors have notified the Delaware court they have claims to that tune against PDVSA and its U.S. unit, the report noted.
First in line, when the court-ordered share sale takes place, which is scheduled for October, would be Canadian Crystallex.
The miner was the first company to make a claim against PDVSA after Venezuela nationalized a gold mine it operated in the country. An arbitration court awarded Crystallex $1.4 billion in damages several years ago and the company agreed to the sum.
Since then, PDVSA has made some payments to the Canadian miner and now it is due around $1 billion, media reported earlier.
ConocoPhillips will also be near the front of the line to recoup costs associated with Venezuela’s expropriation of two of its crude oil projects.
The United States has for years protected Citgo from being broken up and sold off, and Venezuela was holding out hope that its license that protects the refinery would be renewed past its July 19 expiry. The license was indeed renewed until October 19. While the auction will still take place, the U.S. will need to approve any winners.
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 company severed ties with Venezuela’s declared President, Nicolas Maduro, after the United States levied sanctions against Venezuela and the Maduro regime.
By Charles Kennedy for Oilprice.com
Charles is a writer for Oilprice.com