PDVSA's CITGO Petroleum refinery, in Sulphur, Louisiana, USA, June 12, 2018. Photo: Reuters/Jonathan Bachman/File Photo.
US federal judge Leonard P. Stark presented and approved an auction schedule to sell shares of the Venezuelan state-owned company CITGO Petroleum which, if carried out, could lead to the dismantling of the most valuable Venezuelan asset abroad, reports Reuters.
As detailed in the report, the document submitted by Stark “sets bidding and sales procedures, hiring of investment banker Evercore Group and directs an approach to the US Treasury Department to seek a decision on any share sale.”
The US Office of Foreign Assets Control (OFAC), attached to the Department of the Treasury, extended a license until January 20, 2023 that prohibits the sale of CITGO shares to transnationals such as ConocoPhillips or Crystalex, in order to collect alleged debts with Venezuela from the auction of the company.
In plain language, the company was seized by the US government after the launching of its failed “regime”-change operation using former Deputy Juan Guaidó, and has been under OFAC and US control ever since. The seizure provides unparalleled evidence of the United States’ disrespect for the rule of law. In addition, it demonstrates the farce of the US’ promotion of free-market processes.
Reuters specifies that last year, Stark “approved the sale of shares in PDV Holding, whose only asset is CITGO shares, to pay Canadian miner Crystallex $970 million,” on the grounds of a litigation for the expropriation of a mine in Venezuela—a litigation that was plagued with irregularities.
Since 2019, the main Venezuelan asset abroad has been in the hands of agents linked to former deputy Juan Guaidó, whom Washington insists on recognizing as “president in charge” of Venezuela. One of these agents, Horacio Medina, who acts as the alleged head of the refining company’s board of directors, told Reuters that his team is evaluating the way forward, but sees that there is “space to explore alternative options” to an auction.
The schedule presented by Judge Stark contemplates a period of nine months after the launch to consider higher offers, which implies that “no sale could occur until the end of 2023 or the beginning of 2024 if the Treasury of the United States authorizes it,” summarizes the agency.
For his part, Rahim Moloo, Crystallex’s lawyer, referred to the ruling as “an important, almost final step, on this long road to justice.”
Guaidó’s Achievement: US Judge Orders Auction of CITGO (+OFAC)
“Crystallex remains willing to resolve this dispute,” he said. “In light of CITGOS’s recently reported earnings, it seems clear that Venezuela can pay Crystallex,” Moloo argued.
The methodology approved in court allows an initial auction offer to be set and the shares—all or part—of PDV Holding, CITGO’s parent company, to be awarded to the highest bidder.
According to Reuters’ calculations, “the number of shares sold would only be enough to cover Crystallex’s sentence and any others the court attaches to the case.”
ConocoPhillips, which sued Venezuela for $1.2 billion, is closely following this decision. Last week, the transnational corporations Koch Minerals and Koch Nitrogen also asked the same court chaired by Stark to link its ruling to another sentence against Venezuela, for $387 million.
From the United States, they assure that in 2014, CITGO Petroleum was valued at approximately $10 billion. In the first half of 2022 alone, the refiner produced net income in the order of $1.5 billion, and similarly favorable figures are expected for the third quarter, even under management of Guaidó’s officials, who have earned a reputation for corruption and inefficiency.
Featured image: PDVSA’s CITGO Petroleum refinery, in Sulphur, Louisiana, USA, June 12, 2018. Photo: Reuters/Jonathan Bachman/File Photo.
(La IguanaTV) with Orinoco Tribune content
Translation: Orinoco Tribune
OT/JRE/SL
