there's no need to take over Venezuela if we can just take CITGO away from them
linkCitgo, the US’ seventh largest refiner and a cornerstone of Venezuela's oil industry acquired by the state in 1990, has become a focal point in a complex web of litigation and geopolitical manoeuvring. Valued at $13bn, the company's fate now hangs in the balance as US courts move forward with auctioning its shares to satisfy creditors' claims totalling $21.3bn.
The Houston-based refiner, legally owned by Venezuelan state-owned energy company PDVSA but controlled by a holding overseen by the country's opposition since 2019, operates an extensive refining network, 38 terminals and six pipelines, and supplies 4,200 independent retailers, boasting a refining capacity of 807,000 barrels per day (bpd). Recent financial reports indicate robust earnings totalling $5.26bn over the past nine quarters.
The genesis of this long-running legal saga dates back to Hugo Chávez's presidency, marked by a wave of nationalisations that soured Venezuela's relations with international investors since the early 2000s. In 2017, Venezuela defaulted on its debt, further compounding the situation. Among the most aggrieved parties is Crystallex, a Canadian mining firm that won authorisation in 2019 to seize Citgo as compensation for unpaid debts, stemming from the expropriation of its assets.
Other claimants seeking a portion of the sale proceeds are Siemens AG, ConocoPhillips and ExxonMobil Corp., with Conoco alleging debts exceeding $1.2bn over the seized assets.
The recent court proceedings, overseen by federal district judge Leonard Stark in Delaware, have intensified Venezuela's predicament as the auction draws closer, with the deadline for second bidding offers expiring last week. Despite impassioned pleas from Venezuelan authorities, including Pedro Tellechea, Oil Minister and president of PDVSA, which technically still owns Citgo, the auctions have proceeded unabated. Tellechea lambasted the proceedings as an affront to Venezuelan sovereignty, warning of the sale's huge impact on the nation's economic stability.
Several investor groups have submitted binding bids in the ongoing auction of shares in Citgo's parent company. According to sources close to the matter cited by Reuters, at least five groups are involved, with three securing financing commitments from major banks such as JPMorgan and Morgan Stanley, alongside advisors like Rothschild & Co and Elliott Investment Management.
While some bidders aim for all-cash offers, others are leveraging credit bids and cash to bolster their proposals. The court has permitted creditors to utilise their entire claims as part of their bidding strategies, including claims from en ies like Miner Gold Reserve and Rusoro Mining.
The US Treasury has been shielding Citgo from creditors since 2019, but it may give the go-ahead if the auction is approved.
Analysts believe that losing Citgo could further devastate Venezuela's already beleaguered economy, aggravating the hardships endured by its citizens.
Meanwhile, in Caracas the official narrative frames Citgo's potential loss as an act of "imperialist dispossession," laying blame squarely on the United States and political adversaries within Venezuela itself.
“We strongly reject the theft of Citgo instrumentalised by the US government, Leopoldo Lopez, Juan Guaido, Julio Borges, and the neo-fascist oligarchy,” Venezuelan Vice President Delcy Rodriguez said on June 17.
...or, we could just pump some of the more than 250 years of that black gold, that Texas tea we're a sittin' on. Can't do that though, eh, Winester? That'd deny us use of our MIC to bug the Mid-East over their black gold. Keeps Dover active, huh, kids?
Hugo never tried to use the Norway method.
Bargain and use the US and UK companies in a transparent manner.
When Venezuelan oil was nationalized, and they did not have the capability to do all the drilling, refining, transporting, that the US already excels in...
Well, then Hugo left the expertise open to what just happened. Individual ripoffs under the table instead of a big transparent governmental contract.
This is a huge weakness of authoritarian governments. This just asks for corruption, even if Hugo himself did not want it. His predecessors did.
It was a huge mistake, not understanding the interplay between capitalism and governments that are transparent and use government oversight.
The US itself is far from perfect on its relationship with big oil. But at least we get info out and people realize our government subsidizes oil companies.
It is actually DISCUSSED.
Maybe if Donald is re elected, we can build a wall privately again and more people can go to jail. Im sure the Donald would love these non transparent deals and take as much of a piece of the pie as he can.
it's a selling point, supporters envy and admire DJT's brazen self-dealing.
And his vengeance upon Biden, making him a FELON.
Trump did that.
3-5 days?
No shame in being absolutely wrong.
I love tater for finding all this stupid .
...+ Biden convicted FELON.
Trump did that.
No shame if you own it. He should be terribly ashamed.
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