US extends license protecting Citgo from creditors to March 2025 (updated)

Weatherford International

07/11/2024 16:39

(Adds details of license, background, paragraphs 2-4 and 6-7)
    By Daphne Psaledakis and Marianna Parraga
       WASHINGTON/HOUSTON, Nov 7 (Reuters) - The U.S. Treasury
Department on Thursday extended a license protecting
Venezuela-owned Citgo Petroleum from bondholders to March 2025,
a key decision amid a seven-year-long legal case in which the
refiner's parent might be auctioned to pay creditors.
    Citgo's parent, PDV Holding, was found liable by the court
for Venezuela's debts from asset expropriations and debt
defaults. The case has opened a route for creditors to fight for
a piece of Venezuela's crown jewel - Citgo's
807,000-barrel-per-day refining network in the United States. 
    The Delaware court case has gained complexity as holders of
Venezuelan bonds and notes have introduced lawsuits before
different U.S. courts trying to "jump the line" of creditors
that would cash proceeds from the auction. The ranking or line
of creditors has been set by the judge in charge of the case.
    The U.S. Treasury's Office of Foreign Assets Control is
expected to approve the auction's winner, which would ultimately
operate Citgo's facilities, as part of the case. A conditional
$7.3 billion offer made by an affiliate of firm Elliott
Investment Management is pending court approval.
    The Treasury Department also extended to May 2025 a separate
license for U.S. oil service companies Halliburton  HAL.N , SLB
 SLB.N , Baker Hughes  BKR.O  and Weatherford International
 WEATH.UL  to maintain assets in Venezuela amid Washington's
sanction regime on the South American country.  
    The authorization allows the firms to conduct only
transactions "that are ordinarily incident and necessary to the
limited maintenance of essential operations, contracts or other
agreements" in Venezuela.
    The license does not authorize them to drill wells, process,
purchase, sell or ship Venezuela-origin oil. The companies also
cannot hire additional staff or services, except as required for
safety, or engage in any financing deal with Venezuela's
U.S.-sanctioned oil firm PDVSA  PDVSA.UL .

 (Reporting by Daphne Psaledakis in Washington and Marianna
Parraga in Houston
Editing by Matthew Lewis)
 ((marianna.parraga@thomsonreuters.com; +1 713 371 7559; Reuters
Messaging: @mariannaparraga))