U.S. Protects Venezuela-Owned Citgo from Creditors Until July

The U.S. Treasury Department has extended the protection of Citgo Petroleum, a Venezuelan refiner, from creditors until early July. This follows the cancellation of a license for Chevron to operate in Venezuela, amid Venezuelan opposition demands for continued U.S. support for Citgo. The extension puts on hold any transactions related to PDVSA’s maturing bonds, as Maduro’s government protests U.S. actions.

The United States Treasury Department has announced an extension of protections for Citgo Petroleum, a Venezuelan-owned refiner, from creditors until early July. This decision was posted on the department’s website and follows the termination of a crucial license by the Trump administration that permitted Chevron to operate in Venezuela. In light of ongoing legal proceedings regarding an auction of Citgo’s parent shares, the Venezuelan opposition has requested continued U.S. support for Citgo as it remains a vital part of the nation’s overseas assets.

As the U.S. court progresses with the auction of shares from Citgo’s parent company, PDVSA, any prospective owners will require approval from the Treasury’s Office of Foreign Assets Control to manage Citgo’s operations. The Venezuelan opposition also urged the U.S. to cease financial support for President Nicolas Maduro, whose re-elections since 2018 have not been acknowledged by Washington. Consequently, this month, authorization that enabled Chevron to export Venezuelan oil since 2022 was revoked.

The newly issued license supersedes an earlier authorization from November and effectively defers all actions associated with a 2020 maturing bond issued by PDVSA until July 3. The default on this bond has led holders to seek compensation through U.S. courts, targeting Citgo and its U.S.-based affiliates. In response to these developments, Maduro’s government has accused the United States of attempting to “steal” Citgo, a claim stemming from the oil sanctions imposed in the last six years due to the U.S. lack of recognition of his government.

In conclusion, the U.S. Treasury’s extension of protection for Citgo Petroleum reflects significant geopolitical tensions surrounding Venezuela’s management of its resources. As legal disputes continue, the outcome of the protection could influence not only Citgo’s operational future but also broader U.S.-Venezuela relations. The implications of U.S. sanctions and support for the opposition further complicate this vital situation for Venezuela.

Original Source: www.tradingview.com