Factbox: Who are Venezuela creditors seeking to seize Citgo?

Rusoro Mining

19/07/2023 18:20

By Luc Cohen and Marianna Parraga
       July 19 (Reuters) - The U.S. on Wednesday approved a
three-month extension to a license protecting Citgo Petroleum
from creditors seeking to seize the oil refiner's assets. 
    The document comes as a negotiation team representing
Venezuela progresses in talks with bondholders and creditors
with arbitration awards from expropriation claims, a move to
avoid a breakup of Venezuela's most important foreign asset.
    Creditors have flocked to U.S. courts to press claims on
over $20 billion, almost double the value of Citgo Petroleum,
which operates an 807,000-barrel-per-day oil refining network in
the United States.  
    Below is a list of the companies and investors who have
sought to attach claims to a stake in Citgo, the Houston-based
subsidiary of state oil company PDVSA  PDVSA.UL , and a summary
of where their cases stand. 

    PDVSA 2020 BONDHOLDERS
    PDVSA in 2019 defaulted on bonds maturing in 2020, which
were backed by a 50.1% stake in Delaware-registered Citgo
Holding, the oil refiner's immediate parent company. The
bondholders in 2020 won a U.S. court judgment allowing them to
collect $1.9 billion in defaulted principal and interest
payments. 
    PDVSA - whose U.S. assets are controlled by Venezuela's
opposition due to sanctions on President Nicolas Maduro's
socialist government - sued in Manhattan federal court to
invalidate the bonds, arguing they were never approved by
Venezuela's congress. 
    PDVSA submitted written arguments on March 27, and
bondholders followed in June. It is not clear when the court
will rule on the bonds. 
        On June 30, investment fund VR Global Partners LP -
which holds $30 million worth of the bonds - sued PDVSA in
Manhattan federal court, alleging the company fraudulently
induced investors to purchase the bonds even though it privately
believed they were invalid under Venezuelan law. 
    
    CRYSTALLEX
    Canadian gold miner Crystallex is seeking to attach shares
in PDV Holding, another Delaware-registered PDVSA subsidiary, to
collect $970 million outstanding from a $1.4 billion arbitration
award for Venezuela's expropriation of the company's Las
Cristinas mining project in the South American country. 
     U.S. District Court Judge Leonard Stark has granted
Crystallex permission to seize the shares, but existing
sanctions on Venezuela bar any sale or transfer. The U.S. in May
told the court it would look favorably on the proposed auction
of shares. 
    Stark could approve bidding and sale procedures this month.
Under the proposed auction, PDV Holding shares would be sold to
the highest bidder with proceeds used to compensate Crystallex
and possibly others.
    
    CONOCOPHILLIPS
    Stark has said he will grant ConocoPhillips  COP.N 
permission to seize PDV Holding shares once sanctions allow for
it. The oil company is seeking to collect on $1.29 billion
outstanding from a $2 billion arbitration award over PDVSA's
early termination of its Hamaca and Petrozuata projects in
Venezuela. 
    The company also has an $8.5 billion award from the World
Bank's ICSID dispute settlement body against Venezuela's
government over those same projects. Venezuela introduced a
request for the judgment to be annulled, which is pending. 
    Besides Crystallex and Conoco, Stark also has recognized a
claim of about $163 million from Siemens Energy  ENR1n.DE  and a
$246 million claim from Red Tree Investments, which could
receive auction proceeds.
    
    OTHER AWARD HOLDERS
    Several other companies have obtained judgments in U.S.
courts recognizing arbitration awards they have won against
Venezuela for asset expropriations in the country or unpaid
bills.
    A U.S. court of appeals in July rejected Venezuela's bid to
prevent O-I Glass  OI.N , Huntington Ingalls Industries,
ACL1/ACL2/LDO Investments, Koch Minerals and Nitrogen, and
mining firms Rusoro Mining  RML.V  and Gold Reserve  GRZ.V  from
joining the proposed auction of shares in Citgo Petroleum's
parent.
    The decision allows the six firms to move ahead with about
$3 billion in combined claims against PDVSA in Delaware.    

    OTHER BONDHOLDERS
    Venezuela's government and PDVSA have also defaulted on
billions of dollars' worth of bonds which, unlike the PDVSA 2020
bonds, are not secured by shares in Citgo. 
    Several holders of those bonds have also won judgments in
U.S. courts recognizing they are owed money. 
    

    <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
US extends Citgo Petroleum's protection from Venezuela creditors
to October     https://www.reuters.com/article/citgo-creditors-protection/update-1-us-extends-citgo-petroleums-protection-from-venezuela-creditors-to-october-idUSL1N3951NO
US extends Citgo Petroleum's protection from Venezuela creditors
to October     urn:newsml:reuters.com:*:nL1N3951NO
Venezuela pursues debt settlement with Crystallex, Conoco,
bondholders     https://www.reuters.com/markets/venezuela-pursues-debt-settlement-with-crystallex-conoco-bondholders-2023-06-30/
    ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
 (Reporting by Luc Cohen in New York and Marianna Parraga and
Gary McWilliams in Houston
Editing by Matthew Lewis)
 ((luc.cohen@thomsonreuters.com; +1 646 361 1622; Reuters
Messaging: Twitter: @cohenluc))