New York investment firm Elliott Investment Management emerged as a likely buyer of Petroleos de Venezuela Holding Inc., the 100% owner of Citgo Petroleum Corp. The convoluted auction process and legal entanglements with the U.S. Treasury could still scupper its chances.
Based in Houston, Texas, Citgo processes up to 807,000 barrels of oil per day at refineries in Louisiana, Illinois and Texas. The company also owns stakes in terminals, pipelines and lubricant manufacturing plants. It was valued at U.S.$11 billion-$13 billion and is the asset target for creditors from the auction.
Citgo unmoored from Venezuela’s state oil company Petroleos de Venezuela S.A. after sanctions were imposed in 2019. Since then, PDV Holding and Citgo have been controlled by Venezuela’s National Assembly, which is in opposition to President Nicolas Maduro. Maduro blames them for losing the parent company to pay the PDVSA’s debts. The National Assembly counters that it didn’t approve of Citgo being used as collateral.
The seizure of Citgo was triggered by a lengthy legal battle by a Canadian mining company Crystallex, which wanted to recoup unpaid damages from the expropriation of its Venezuelan assets during the administration of former President Hugo Chavez.
A group of 18 creditors wants $21.3 billion in arbitration rewards for past expropriations and debt defaults in Venezuela, some of which accrued during the Chavez era. To recoup these debts, the U.S. seized PDV Holding and put it up for sale.
PDV Holding is the U.S. subsidiary of state oil company Petroleos de Venezuela, S.A. and is the indirect sole stockholder of Citgo Petroleum Corp.