PDVSA’s supervising board to appeal new creditors’ move to go after Citgo

Photo: Marco Bello – Reuters


A board that supervises Venezuela’s overseas assets said it plans to file an appeal to a U.S. court’s decision granting four firms the right to seize shares in one of the parent companies of Venezuela-owned U.S. refiner Citgo Petroleum.

By Reuters – Marianna Parraga and Gary McWilliams

Mar 31, 2023

A U.S. court is preparing for an auction of shares in Delaware-registered PDV Holding to satisfy a $970 million claim by Canadian miner Crystallex stemming from a expropriation of its Venezuelan assets. Other companies have sought to attach their own judgments to the case, leading to a feud this week among attorneys over priority.

The decision by a U.S. judge in Delaware to approve the attachments is contingent on green light by the U.S. Treasury Department.

O-I Glass Inc (OI.N), Huntington Ingalls Industries Inc (HII.N), ACL1 Investments Ltd, and Rusoro Mining Ltd (RML.V) received the court’s blessing after showing state-oil firm PDVSA was the “alter ego” of Venezuela’s government in asset battles.

An ad-hoc board created by Venezuela’s National Assembly in 2019 to supervise PDVSA’s foreign subsidiaries, especially Houston-based Citgo Petroleum, will oppose any conditioned auction, board’s president Horacio Medina told Reuters.

Lawyers representing Crystallex and U.S. oil producer ConocoPhillips (COP.N), which have been fighting for years to recoup billions of dollars in expropriated assets, complained on Thursday that rights granted to additional creditors could complicate any sale.

“We might need to think about how the court is going to rank what is now becoming a very significant number of very substantial claims,” said Amy Wolf, an attorney representing ConocoPhillips.

Even without green light from the U.S. Treasury, which has protected Citgo from creditors in recent years, U.S. Judge Leonard Stark has set a calendar for an eventual auction and asked investment banker Evercore Group to begin working on a tender.

Stark this week rejected a motion by lawyers representing Venezuela to disqualify the person appointed to manage the potential auction, and said he expects to hear by April 7 on whether the U.S. Treasury would allow a transfer of shares.

Read More: Reuters – PDVSA’s supervising board to appeal new creditors’ move to go after Citgo

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