Venezuela expects US to renew license protecting Citgo from creditors -sources
By Marianna Parraga
HOUSTON, Oct 12 (Reuters) - Venezuela expects the United States will soon extend temporary protection from creditors over Houston-based oil refiner Citgo Petroleum, paving the way for payment settlement talks ahead of a court-ordered auction, two people close to the matter said.
A federal judge in Delaware will on Oct. 23 launch an auction of shares in Citgo’s parent PDV Holding, while the court reviews claims from about a dozen creditors that hold judgments in their favor for asset expropriations and payments that Venezuela has defaulted on.
PDV Holding’s only asset is Citgo Petroleum, the foreign crown jewel of Venezuelan state oil firm PDVSA and operator of three large and profitable U.S. refineries and fuel distribution networks.
As start of the auction nears, lawyers and negotiators representing Venezuela are holding talks to reach payment deals that at least could reduce the total amount of claims in Delaware, which surpass $23 billion, roughly twice the market value of Citgo.
U.S. officials have told Citgo executives and members of a board supervising the refiner that the most likely scenario is that the creditor protection will be renewed for another three months, the people said. The current license expires Oct. 19.
It was not immediately clear if this would be the last renewal before the U.S. Treasury Department’s Office of Foreign Assets Control assesses whether to give a final green light to companies awarded shares during the auction.
The auction’s first bidding round was, pending completion of an asset valuation and eligibility process, set this week for Jan. 22.
The U.S. Treasury and Citgo’s ultimate parent company, Caracas-based PDVSA, did not immediately respond to requests for comment.
Citgo last year posted a record $2.8 billion annual profit, and a $1.3 billion profit in the first six months of this year. (Reporting by Marianna Parraga; editing by John Stonestreet)