U.S. Court Schedules Citgo's Share Sale for October

Last week, a U.S. court in Delaware set October 23 as the auction date for?Citgo Petroleum's share sale. The announcement surfaced as the U.S. Office of Foreign Assets Control (OFAC) extended its protection over the refiner.

Citgo Petroleum, which is a Venezuelan subsidiary in the U.S., is auctioning shares to pay back creditors for outstanding disputes with Venezuela. The OFAC has extended its protection over Citgo Petroleum until October 20, shielding the refinery from creditors.

The OFAC has protected Citgo Petroleum since the U.S. imposed sanctions on Venezuela in 2019. Creditors like gold miner Crystallex International Corporation (Toronto, Ontario) are seeking outstanding fees from the Venezuelan state, and the sale of Citgo's shares offers them this opportunity.

Venezuela was ordered to pay Crystallex US$1.4 billion in 2016 by a court over the expropriation of its mine in the South American country.

A Memorandum Order signed by U.S. Judge Leonard Stark declared, "While there remains uncertainty as to whether OFAC will authorize the eventual sale of the PDVH shares (Citgo), and there is always the chance that events will cause the United States to change its policy, the Court is persuaded that the Special Master should proceed promptly with the sale process."

Citgo is currently controlled by the Venezuelan opposition, following the U.S. government's recognition of the interim government of Juan Guaido in 2019. Nevertheless, Venezuelan President Nicolas Maduro has been demanding the asset's return to the government, as he blames the opposition for Citgo's current situation.

Citgo's control likely will remain controversial, as the Venezuelan government and opposition return to negotiations ahead of the presidential elections scheduled for next year. Last week, the parties held talks during the European Union-Celac meetings in Brussels, where a handful of presidents aimed to bring the parties closer to an agreement.

The U.S. refiner operates the Lake Charles, Lemont and Corpus Christi refineries, which have a combined capacity of just more than 800,000 barrels per day (BBL/d) of oil.

Citgo is expected to spend nearly US$232 million on refinery projects in 2022 or 2023. Of those, more than half (US$124 million) is related to unit additions and upgrades, and the rest (US$108 million) on maintenance projects, according to Industrial Info's Global Market Intelligence (GMI) Petroleum Refining Project Database. Subscribers can?click here?for a list of detailed project reports and?click here?for a list of related plant profiles.

Projects totaling US$143 million in value already have kicked off. Most of the spending is focused on the 165,000-BBL/d Corpus Christi refining complex.

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