• 3 minutes Nucelar Deal Is Dead? Iran Distances Itself Further From ND, Alarming Russia And France
  • 5 minutes Don Jr. Tweets name Ukraine Whistleblower, Eric Ciaramella. Worked for CIA during Obama Administration, Hold over to Trump National Security Counsel under Gen McCallister, more . . . .
  • 9 minutes Shale pioneer Chesepeak will file bankruptcy soon. FINALLY ! The consolidation begins
  • 12 minutes China's Blueprint For Global Power
  • 3 hours Pioneer's Sheffield in Doghouse. Oil upset his bragging about Shale hurt prices. Now on campaign to lower expectations, prop up price.
  • 4 hours Tesla Launches Faster Third Generation Supercharger
  • 5 hours Passerby doused with flammable liquid and set on fire by peaceful protesters
  • 55 mins EU has already lost the Trump vs. EU Trade War
  • 7 hours Who writes this stuff? "Crude Prices Swing Between Gains, Losses"
  • 3 hours China's Renewables Boom Hits the Wall
  • 20 hours Joe Biden, his son Hunter Biden, Ukraine Oil & Gas exploration company Burisma, and 2020 U.S. election shenanigans
  • 14 hours Climate Change Consensus Shifts in Wind, But Gas Is Still the Right Move
  • 21 hours Atty General Barr likely subpeona so called whistleblower and "leaker" Eric Ciaramella
  • 19 hours Does .001 of Atmosphere Control Earth's Climate?!
  • 10 mins ''Err ... but Trump ...? Humph''
  • 19 hours Trump Interview On Farage's Radio Show #classy
Why 2020 Could Be A Crisis Year For Refiners

Why 2020 Could Be A Crisis Year For Refiners

New fuel specifications are set…

The World’s Newest Oil Benchmark

The World’s Newest Oil Benchmark

The world’s newest crude oil…

Venezuela's Prize Oil Asset May Soon Be Up For Grabs

Venezuela Oil Asset

Venezuela’s opposition is getting ready to file within days a lawsuit in the United States seeking to prevent bond holders of Venezuelan state oil firm PDVSA from going after shares in its U.S. subsidiary Citgo over an expected PDVSA bond default this month, Reuters reports, citing three sources familiar with the matter.

PDVSA has to make a payment of US$913 million on the 2020 bond in late October, but the bond is widely expected to go into default because the Venezuelan oil firm doesn’t have the money to make the payment.

PDVSA, however, has used shares in its most prized foreign asset, Citgo, as collateral for the bond. The bonds are backed by 50.1 percent in the U.S.-based refiner, so should the bond default, bondholders may rush to claim shares of Citgo. Investment manager Ashmore Group plc has urged PDVSA to pay the bond, and in case of a bond default, it could launch legal actions for auctioning off Citgo shares so that creditors are paid, Bloomberg reports.  

Now advisors to Venezuela’s opposition leader Juan Guaidó are ready to argue in a U.S. court that the bond was illegal in the first place, because at the time of its issuance, Nicolas Maduro’s government had not asked permission from Venezuela’s national assembly to use shares in Citgo as collateral, according to Reuters’ sources.

Related: There’s Tremendous Room For Growth In Offshore Oil & Gas

Earlier this year, the Venezuelan opposition made a US$71-million payment on the bond, which could complicate the opposition’s argument that the bond is illegal.

Last week, several U.S. lawmakers—mostly Republicans and mostly representing Texas and Louisiana where Citgo has refineries—asked U.S. President Donald Trump to take executive action to stop PDVSA’s bondholders from potentially seizing Citgo.

Citgo Petroleum Corporation is one of the largest oil refineries in the United States. The company’s refineries in Texas, Louisiana, and Illinois have a combined total refining capacity of around 749,000 barrels per day (bpd). Citgo’s current operations are managed by two dueling boards of directors—one appointed by Maduro and one appointed by Guaidó, and both are digging in over the power struggle for Venezuela’s U.S.-based refinery that rakes in US$30 billion in revenue.  

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oillprice.com:



Join the discussion | Back to homepage

Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News
Download on the App Store Get it on Google Play