U.S. Venezuela Oil Strategy Threatens Citgo Auction

As U.S. President Donald Trump moves quickly to assemble a $100 billion effort to revive Venezuela’s oil industry, his administration has yet to finalize the fate of the crown jewel of the country’s foreign assets, U.S. refining company Citgo Petroleum, sources close to the matter said, Marianna Parraga reported for Reuters.

A strategy for Citgo has become a “sticky” topic. (Photo: Beyond My Ken, Wikimedia Commons) 

Houston-based Citgo has been tied up in a lengthy auction of its parent company, PDV Holding, organized by a Delaware court to pay billions of dollars to creditors for debt defaults and expropriations in Venezuela.

In November, the court approved a $5.9 billion bid and ordered the sale of PDV Holding’s shares to Amber Energy, an affiliate of U.S. hedge fund Elliott Investment Management, though execution still requires regulatory approvals—particularly from the U.S. Treasury Department.

The Treasury’s Office of Foreign Assets Control (OFAC) has six months, until the end of May, to either approve or reject the auction’s winner, temporarily putting the process on hold.

A strategy for Citgo has become a “sticky” topic, the sources said, in the wake of the U.S. seizure of President Nicolás Maduro. Washington has since said it would take control of Venezuela’s oil resources indefinitely.