• 3 minutes e-car sales collapse
  • 6 minutes America Is Exceptional in Its Political Divide
  • 11 minutes Perovskites, a ‘dirt cheap’ alternative to silicon, just got a lot more efficient
  • 2 days The United States produced more crude oil than any nation, at any time.
  • 8 days e-truck insanity
  • 3 days How Far Have We Really Gotten With Alternative Energy
  • 7 days Oil Stocks, Market Direction, Bitcoin, Minerals, Gold, Silver - Technical Trading <--- Chris Vermeulen & Gareth Soloway weigh in
  • 6 days James Corbett Interviews Irina Slav of OILPRICE.COM - "Burn, Hollywood, Burn!" - The Corbett Report
  • 6 days The European Union is exceptional in its political divide. Examples are apparent in Hungary, Slovakia, Sweden, Netherlands, Belarus, Ireland, etc.
  • 8 days Biden's $2 trillion Plan for Insfrastructure and Jobs
  • 8 days "What’s In Store For Europe In 2023?" By the CIA (aka RFE/RL as a ruse to deceive readers)
  • 11 days Bankruptcy in the Industry
IEA Cuts 2024 Oil Demand Growth Forecast

IEA Cuts 2024 Oil Demand Growth Forecast

Global oil demand growth is…

U.S. Moves To Protect PDVSA-Owned Citgo For Another Year

The Treasury Department extended a moratorium on transactions on a bond issued by the U.S. arm of Venezuela’s PDVSA, Citgo, for another year in the latest move to shield the company from creditors trying to take it over.

According to Bloomberg, this is the longest extension of the ban so far.

AFP recalls that control of the U.S. business of PDVSA was handed over by the Trump administration to the Venezuelan opposition led by Juan Guaido in 2019 after a round of new sanctions against Caracas. It is as part of efforts to keep Citgo in Guaido’s hands that the ban on transactions was extended.

The complicated situation that Citgo is in right now is a result of PDVSA using the U.S. business as collateral for a lot of loans. One such loan made Russia Rosneft, for example, eligible for effectively taking over Citgo if the debt was not repaid—something U.S. authorities have vowed never to allow.

Yet there is also a Canadian company that has laid a claim to Citgo. Crystallex, a miner that saw its operations in Venezuela nationalized by Hugo Chavez, won a court battle against Venezuela a few years ago that ended with it being awarded compensation to the tune of $1.4 billion.

Since the government in Caracas was highly unlikely to respect the ruling of the arbitration court, Crystallex made an approach to take over Citgo and sell it—or rather its parent company that controls the capital—to get its money. It scored a point in that fight when a U.S. judge ruled that Citgo was not separate from the Venezuelan state, so Crystallex could claim it as a means of getting its awarded compensation.

But Crystallex is far from alone. Just last year, creditors were owed some $7 billion by Citgo’s ultimate parent, PDVSA, and the Venezuelan state, converged on the company to collect filing claims against the company. The biggest creditors in the crowd are ConocoPhillips which is owed $1.3 billion because of Chavez’s nationalization back in the 90s, and a group of investors who bought into a Citgo bond, now in default. The group’s claim is for $2 billion.

By Charles Kennedy for Oilprice.com


More Top Reads From Oilprice.com:

Join the discussion | Back to homepage

Leave a comment
  • Mamdouh Salameh on January 21 2022 said:
    The West lectures the world all the time about the noble principles of justice, freedom and liberation that underpin western moral code. Yet, it is the first to abuse these principles when it suits it. The situation of Venezuela’s Citgo, a group of refineries owned by PDVSA in the United States, is a case in point.

    Control of Citgo was handed over by the Trump administration to the Venezuelan opposition led by Juan Guaido who was recognized by western nations as the provisional president of Venezuela in 2019 after a round of new sanctions against Caracas. It is still in the hands of the defunct Guaido who has now no authority whatsoever except being the United States’ puppet.

    Another display of western justice is the refusal of the Bank of England to release Venezuelan gold deposits worth $1.2 bn to the rightful Venezuelan government despite repeated requests on political grounds, a flagrant interference in the affairs of a sovereign country.

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London

Leave a comment

EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News