US court clears sale of Citgo shares
A US federal court has given a go-ahead to the potential sale of shares in US refiner Citgo to satisfy Venezuela's debts, stressing that upholding debtholders' rights outweigh any political considerations.
The decision is another setback for Venezuela's US-supported political opposition, which has nominal control over Citgo since last year, even though the refiner's parent, state-owned PdV, remains in the control of the Venezuelan government of President Nicolas Maduro in Caracas that faces US sanctions.
The legal process for selling Venezuela's most valuable foreign asset can proceed, judge Leonard Stark of the US District Court for the District of Delaware ruled on 22 May, after the US Supreme Court declined to consider an appeal of the lower court ruling. The US district court will hear arguments on procedure for the sale on 17 July.
The primary claimant for shares in Citgo's US holding company PdVH is former Canadian mining firm Crystallex, which is now controlled by New York hedge fund Tenor Capital. The Delaware district court is considering separate claims from Crystallex and US independent producer ConocoPhillips, both of which have won international arbitration awards related to the Venezuelan government's takeover of their assets.
Crystallex, which is seeking to collect a $1.2bn arbitration award for expropriated gold mining interests, convinced the Delaware court in 2018 that Citgo operated as an alter ego of the Venezuelan government and could be sold to satisfy the country's more than $150bn in debts. Among other creditors laying claim to Citgo shares are holders of a PdV 2020 bond, which fell into default in October 2019.
The spotlight now shifts to the US government, which issued an executive order in August 2019 that bars sales of any Venezuelan assets without Treasury Department clearance.
Crystallex already petitioned Treasury's sanctions enforcement arm, the Office of Foreign Assets Control (Ofac), for a license to proceed with the sale.
Treasury clarified in late November that US sanctions on Venezuela and the Maduro government prohibited any enforcement of judicial or arbitration decisions without a lifting of sanctions or an executive order. A separate, specific license also prevents bondholders from taking over the refiner. The US last month extended that license into July.
Stark in his closely watched ruling noted that "no executive branch order or regulation prohibits this court from moving forward in determining how the attached shares will be sold." Stark invited US government representatives to make counter-arguments at the 17 July hearing.
Debtholders' rights hold primacy over other considerations, Stark said, citing a US Third Circuit Court of Appeals decision. "Any outcome where Crystallex is not paid means that Venezuela has avoided its obligations."
Venezuela's Western-recognized interim government described the Crystallex case as a "monstrosity" of Maduro's making but asserted that Citgo remains "protected" from seizure thanks to the US executive order.
Figurehead
Venezuela's mainstream opposition has made the defense of Citgo a policy cornerstone since National Assembly speaker Juan Guaido declared an interim presidency in January 2019. Guaido and his exiled advisers argue that Citgo is vital to Venezuela's reconstruction after Maduro is forced out.
The keep-Citgo strategy has become more difficult to sustain the longer that Maduro remains in power. The Guaido authority has no access to Citgo's revenue and cannot tap the refiner to supply gasoline to Venezuela because of the US sanctions.
Over the weekend the first Iranian cargo of gasoline arrived in Venezuela, where fuel scarcity has impeded distribution of food and medical supplies.
Guaido legal adviser Yon Goicoechea told reporters on 22 May that the interim authority "can't take one dollar from Citgo" because "even the earnings of Citgo are frozen and protected by Ofac."
"On the one hand this is bad because the interim government can't use it for social programs or relief, but it is good because… thanks to Ofac's protection the creditors can't get that money."
Related news posts
Yemen’s Houthis attack ships in Red Sea, Mediterranean
Yemen’s Houthis attack ships in Red Sea, Mediterranean
Singapore, 16 July (Argus) — Yemen-based Houthi militants have launched three military operations in the Red Sea and the Mediterranean, Yemen's state-owned news agency Saba said on 15 July. The Houthis carried out multiple attacks against an Israel-owned oil product tanker in the Red Sea, according to US Central Command (Centcom) on 16 July. The Houthis used three surface vessels to attack the Panama-flagged and Monaco-operated Bentley I , which was carrying vegetable oil from Russia to China, Centcom said. There was no reported damage or injuries, Centcom said. Bentley I loaded 39,480t of sunflower oil at Russia's Taman port on 3 July, according to global trade analytics platform Kpler. The Houthis also separately attacked a Marshall Islands-owned, Greek-operated crude oil tanker Chios Lion with an uncrewed surface vessel (USV) in the Red Sea. The USV caused damage but the Chios Lion has not requested assistance and there have not been any reported injuries, Centcom said. The Houthis described its hit as "accurate and direct", according to Saba. The Chios Lion loaded 60,000t (387,000 bl) of high-sulphur straight-run fuel oil on 30 June and 30,000t of fuel oil on 18 June, both at Russia's Tuapse port, according to Kpler. It planned to unload these in China on 22 July. The Houthis have claimed responsibility for these two ship attacks, which were targeted "owing to violation ban decision of access to the ports of occupied Palestine by the company that owns the ship". The Houthis also claimed a third attack on the Olvia with the Iraqi Islamic Resistance in the Mediterranean, with this having "successfully achieved its objective". The Olvia loaded about 6,300t of very-low sulphur fuel oil at Israel's Haifa port on 12 July and was scheduled to unload this at Israel's Ashdod refinery on 13 July. Crude prices were largely lower at 04:00 GMT. The Ice front-month September Brent contract was at $84.63/bl, lower by 22¢/bl from its settlement on 15 July when the contract ended 18¢/bl lower. The Nymex front-month August crude contract was at $81.65/bl, down by 26¢/bl from its settlement on 15 July when the contract ended 30¢/bl lower. By Tng Yong Li Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Trump taps Vance as running mate for 2024
Trump taps Vance as running mate for 2024
Washington, 15 July (Argus) — Former president Donald Trump has selected US senator JD Vance (R-Ohio) as his vice presidential pick for his 2024 campaign, elevating a former venture capitalist and close ally to become his running mate in the election. Vance, 39, is best known for his bestselling memoir Hillbilly Elegy that documented his upbringing in Middletown, Ohio, and his Appalachian roots. In the run-up to the presidential elections in 2016, Vance said he was "a never Trump guy" and called Trump "reprehensible." But he has since become one of Trump's top supporters and adopted many of his policies on the economy and immigration. Vance voted against providing more military aid to Ukraine and pushed Europe to spend more on defense. Trump said he chose his running mate after "lengthy deliberation and thought," citing Vance's service in the military, his law degree and his business career, which included launching venture capital firm Narya in 2020. Vance will do "everything he can to help me MAKE AMERICA GREAT AGAIN," Trump said today in a social media post. Like Trump, Vance has pushed to increase domestic oil and gas production and criticized government support for electric vehicles. President Joe Biden's energy policies have been "at war" with workers in states that are struggling because of the importance of low-cost energy to manufacturing, Vance said last month in an interview with Fox News. Trump made the announcement about Vance on the first day of the Republican National Convention in Milwaukee, Wisconsin, and just two days after surviving an assassination attempt during a campaign event in Pennsylvania. Earlier today, federal district court judge Aileen Cannon threw out a felony indictment that alleged Trump had mishandled classified government documents after leaving office. By Chris Knight Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
France's Annecy Haute-Savoie airport will offer SAF
France's Annecy Haute-Savoie airport will offer SAF
London, 15 July (Argus) — Global airport operator Vinci Airports and TotalEnergies have partnered to provide sustainable aviation fuel (SAF) and electric charging stations at France's Annecy Haute-Savoie Mont-Blanc airport. TotalEnergies will supply SAF made from waste and residues such as used cooking oil (UCO) to be blended up to 35pc with conventional aviation fuel. It will also install an electric charging station for light aircraft with minimum power of 22 kW. The installation is expected to be completed by October. Vinci Airports first made SAF available to users of Clermont-Ferrand Auvergne airport in France in 2021. The SAF, produced from UCO, is supplied by Air BP under a refuelling contract with Vinci Airports. The company said five of its airports now offer biofuels. By Evelina Lungu Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Waning German products oversupply evens domestic prices
Waning German products oversupply evens domestic prices
Hamburg, 15 July (Argus) — Germany's recent refined products oversupply, particularly in the south, is waning because of higher demand and technical issues reducing availability. Price differences within the country are starting to level out. Availability of heating oil and road fuels at the Bayernoil consortium's 215,000 b/d Vohburg-Neustadt refinery in Bavaria is restricted. At least one of the refinery's stakeholders is restricting loadings of E5 and 98 Ron gasoline and will probably continue to do so until the end of July. Planned maintenance works on a reformer have reduced production. Diesel and heating oil availability for spot sale are also restricted. A unit outage is affecting the refinery's diesel throughput, and a damaged heating oil tank at Vohburg has restricted loading capabilities since June. Term contracts are unaffected. Demand has increased across the board because of lower domestic prices, after Ice gasoil futures dropped week-on-week. Traded heating oil volumes reported to Argus last week rose especially strongly, by 28pc, and fuel demand also went up. By Natalie Mueller Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
![](/_next/image?url=%2F-%2Fmedia%2Fproject%2Fargusmedia%2Fmainsite%2Fimages%2F14-generic-hero-banners%2Fherobanner_1600x530_generic-c.jpg%3Fh%3D530%26iar%3D0%26w%3D1600%26rev%3D-1%26hash%3DFC2BEDE406483FEF5FDB9549159BAC11&w=3840&q=75)
Business intelligence reports
Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.
Learn more