Auction For Citgo Assets To Begin This Week
Auction For Citgo Assets To Begin This Week | OilPrice.com
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Later today, a Texas judge is set to launch an auction for the assets of Citgo—the U.S.-based, Venezuela-controlled refiner that became a bargaining chip between Caracas and Washington.
For four years, as Reuters wrote in a report over the weekend, the U.S. federal government protected Citgo from its creditors and loss claimants, all of them eager for a piece of the refiner’s pie to cover losses incurred during Venezuela’s nationalization drive during Hugo Chavez’ reign in the 90s.
Those creditors have claims against Citgo’s ultimate parent, the Venezuelan state, for billions of dollars. Now, they might get a chance to get some of the money from the auction, which could end up raising as much as $13 billion, again per Reuters.
Overall, creditors and claimants have sought to recoup at courts in Delaware a total of $23 billion in claims and arbitration awards against Venezuela.
Earlier this month, the first round of bidding was set for January 22 and the final round for May 20, 2024, after the U.S. federal government granted Citgo an extension of its protection from creditors until January. Before each round, the court will have to clear a list of claimants for participation in the share auction who have obtained writs of attachment.
Citgo is the seventh-largest refiner in the United States with a total capacity topping 800,000 barrels daily. 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.
According to Reuters, potential bidders for the Venezuelan refiner include Marathon Petroleum, Motiva Enterprises, Valery Energy, and Koch Industries. This means that Citgo could become part of one of the largest refiners in the U.S. while some of its creditors would get some of the money they claim they are owed by Citgo’s parent. That parent, meanwhile, will get nothing as the money goes into repaying those claimants.
By Charles Kennedy for Oilprice.com
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