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Citgo’s Sale Draws Nearer as Claimants Submit Binding Bids

The deadline for submitting binding bids for the parent company of Venezuelan refiner Citgo Petroleum is expiring on Tuesday while the deadline for completing the court-appointed auction and the awarding of the winners is July 15.   

A U.S. federal court in Delaware is accepting until today binding bids in the second bidding round for the shares of Citgo’s parent company, Venezuela’s PDV Holding, as creditors and claimants seek compensation for asset nationalization under Hugo Chavez and failure to repay debts under Nicolas Maduro.

The sale process of shares to pay creditors and claimants against Venezuela’s oil asset appropriation and debts owed by Citgo was launched by a Delaware court in October 2023.

A first bidding round with non-binding offers ended earlier this year, and the deadline for submitting of binding bids in second bidding round is today.

Overall, creditors and claimants have sought to recoup at courts in Delaware a total of $24 billion in claims and arbitration awards against Venezuela.

However, in the first round of the auction the highest bid was only $7.3 billion, which is just one-third of the value of the claims approved by the court, Reuters reported in March this year.

To compare, Citgo is valued at between $11 billion and $13 billion.

If the second-round bids do not come close to about $10 billion, Venezuela could seek a third bidding round, two sources told Reuters earlier this week.

Meanwhile, U.S. officials and lawmakers have recently met with Venezuelan opposition politicians and supervisors of state-owned refiner Citgo Petroleum, as Venezuela seeks to pause the court-ordered auction of shares, sources close to the discussions told Reuters earlier in June.

Citgo is the seventh-largest refiner in the United States with a total capacity topping 800,000 barrels per day (bpd). It has plants in Texas, Louisiana, and Illinois, along with pipelines and a gasoline distribution network that supplies 4,200 outlets in the United States.

By Charles Kennedy for Oilprice.com

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