PE firm Elliott bids $7.3bn for Citgo assets: Update

Spanish Market: Crude oil, Oil products
27/09/24

Adds reaction from Amber, details throughout.

An affiliate of private equity group Elliott Investment Management has been selected as the top bidder in an auction for US refiner Citgo, with a bid of $7.286bn.

The special master for the auction, being held in the US District Court for the District of Delaware, will need to make a final formal recommendation for the court to choose the Elliott affiliate, Amber Energy, pending a 1 October hearing with parties disputing the auction. But a final hearing to ratify the sale of over 800,000 b/d of refining capacity could be held in November.

Final bids for Citgo's US refineries, lubricant plants, midstream and retail assets were submitted on 11 June, with the auction aiming to satisfy debts owed by the company's parent firm, Venezuelan state-owned PdV.

If the sale to Amber moves forward following a successful November hearing, it will mark the largest purchase of US refining assets since Andeavor's acquisition by Marathon Petroleum in 2018.

"Amber Energy's strategy for growth includes plans to reinvest in the business and potentially pursue strategic investments that enhance the profitability of Citgo," the company said.

Citgo was not immediately available for comment.

Amber is lead by chief executive Gregory Goff, who was previously chairman, president, and chief executive officer of Andeavor. Company president Jeff Stevens is currently president of Franklin Mountain Energy, which is focused on the Permian basin. He has also been an executive officer of independent refiner and marketer Western Refining.

The company plans to keep the Citgo brand, and expects the deal to close by mid-2025.

Conditions of the deal include the buyer applying for and acquiring a license from the US Treasury's Office of Foreign Assets Control, because the ultimate owner of Citgo is Venezuelan state-owned PdV, which is subject to US sanctions.

"We look forward to partnering with the people of Citgo to ensure that the company continues to operate with the highest standards of safety and reliability," Amber said.

Even though it is owned by PdV, Citgo since 2019 has operated under a board appointed by the Venezuelan opposition and vetted by the US government after the US rejected Venezuela's 2018 presidential election as illegitimate. PdV remains under control of President Nicolas Maduro's government.

Maduro has rejected the US court proceedings on selling Citgo as "theft" and the issue is likely to feature in his protracted battle with the US-backed opposition, which claims to have defeated Maduro in the July presidential election.

The court earlier this year approved a ranking order in which debtors will be paid out of proceeds, rather than allocating them on a pro rata basis. The first in line is defunct Canadian mining firm Crystallex, now owned by New York hedge fund Tenor Capital, with a $990mn claim. ConocoPhillips has a total of three claims approved by court, but only two of those are likely to be satisfied, potentially netting $1.4bn.

The next largest is a $1.5bn claim by Russian-Canadian gold miner Rusoro, while energy company Koch's minerals arm is chasing a $457mn claim.

Separate US court proceedings involve holders of $3.4bn in PdV 2020 bonds guaranteed by 50.1pc in Citgo Holding — a PdVH-owned legal entity that directly owns Citgo. In theory, the bondholders have the right to be paid first before other claimants are satisfied. The US government has blocked the bondholders' ability to pursue the claim, most recently issuing a ban that is valid until mid-October.

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17/11/24

Trump taps oil services head as US energy secretary

Washington, 17 November (Argus) — President-elect Donald Trump intends to nominate oil services company Liberty Energy's chief executive Chris Wright to lead the US Department of Energy (DOE), giving him oversight over LNG export facilities and a vast portfolio of federally-backed energy projects. Wright also will serve on Trump's planned Council of National Energy, which will oversee policies across the federal government affecting energy production, permitting, transportation and regulation. Trump said he wants Wright to work alongside North Dakota governor Doug Burgum, who Trump has nominated as US interior secretary, to oversee "the path to US ENERGY DOMINANCE" by cutting regulations and supporting investments from the private sector. "As Secretary of Energy, Chris will be a key leader, driving innovation, cutting red tape, and ushering in a new 'Golden Age of American Prosperity and Global Peace,'" Trump said. Liberty Energy, which was founded in 2011, focuses on hydraulic fracturing services and earned $1.2bn last year. Wright has downplayed the urgency for the world to address climate change or transition away from fossil fuels. He has criticized the use of phrases like "climate crisis" and "carbon pollution", which he says are impeding projects that could alleviate energy poverty. Those terms "are not only deceptive, they are in fact destructive deceptions," Wright said in a video he posted last year on YouTube. "Destructive because they drive centrist politicians and regulators to oppose life-critical infrastructure, like building pipelines and natural gas export terminals." If confirmed by the US Senate, Wright would be responsible for deciding how to resolve a "pause" on US LNG export licensing that President Joe Biden put in place in January. DOE has been studying whether allowing more gas exports would exacerbate climate change or hurt consumers by increasing domestic natural gas prices. The vast majority of DOE's budget goes to maintaining the US stockpile of nuclear weapons and cleaning up contaminated nuclear sites. DOE also manages the four facilities that make up the US Strategic Petroleum Reserve, which currently holds 387.8mn bl of crude, and oversees 17 national laboratories that are spread across the US. In the last four years, the US Congress substantially increased DOE's role in energy. DOE is currently managing billions of dollars in funds provided by the 2021 infrastructure law, such as an $8bn initiative meant to support "hydrogen hubs" and a $2.5bn carbon capture demonstration program. The Inflation Reduction Act expanded DOE authority to issue loans for clean energy projects by about $100bn. By Chris Knight Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Cop: Parties continue slow work on finance goal: Update

16/11/24

Cop: Parties continue slow work on finance goal: Update

Updates throughout Baku, 16 November (Argus) — Parties at the UN Cop 29 climate talks in Baku have asked for more time to work on "specific proposals" for a new finance goal, working from a draft text released yesterday , but it is unlikely to yield progress on key sticking points. Country representatives are seeking to agree on a new climate finance goal for developing nations, following on from the current — broadly recognised as inadequate — $100bn/yr target. A plenary is due to take place later today in Baku. "Over the last few days some people have doubted whether collectively we can deliver. It is time for the negotiators to start proving them wrong," Cop 29 deputy lead negotiator Samir Bejanov said. The current draft text still fails to bridge the huge divide between developed and developing countries on key issues such as an amount for the goal, the contributor base and what the funds should be used for. And the new version due to come out today is unlikely to show meaningful progress on these issues, observers suggested, leaving them for ministers to tackle next week. Technical negotiators continue to try and move forward on topics such as funds' access and transparency. Developed countries have still not proposed a number for the goal, and want the contributor base broadened. Developing countries remain broadly united in calling for climate public finance of over $1 trillion/yr. Options show that developing country parties seek a new finance goal that serves mitigation — actions to reduce emissions — adaptation and loss and damage. Adaptation refers to adjustments to avoid global warming effects where possible, while loss and damage describes the unavoidable and irreversible effects of such change. Developed nations are also pushing for sub-targets of $220bn/yr for least developed countries (LDCs) and $39bn/yr for small island developing states (Sids), in which money for adaptation should come in the form of grants and highly concessional finance and funding for loss and damage "primarily in grants". Multi-layered The multi-layered approach in the draft, mostly supported by developed countries, does not mention loss and damage. On broadening the contributor base, it has options calling on "parties in a position to contribute" or "all capable parties" to "mobilise jointly $100bn/yr for mitigation and adaptation in developing countries by 2035". The UN climate body the UNFCCC works from a list of developed and developing countries from 1992 — delineating 24 countries plus the EU as developed — and many of these note that economic circumstances have changed in some countries, including China, over the past 32 years. China between 2013 and 2022 provided and mobilised $45bn in climate finance to developing countries, equivalent to 6.1pc of climate finance provided by all developed countries in the period, according to think-tank WRI. A few options in the multi-layered approach in the draft talk about "investments", language that developing countries do not support, and "investing trillions "from all sources, public, private, domestic and international". Developing nations are not against private sector financing, but they want the main figure for the new finance goal to come from public sources, observers said. Some parties on both sides are calling for an acceleration of the reforms of multilateral development banks, key to leverage billions in private sector finance, as well as for the use of taxes and levies. But these issues are largely outside of the remit of the Cop, even though they may get a boost from the upcoming G20 leaders summit on 18-19 November. UN climate body chief Simon Stiell today called on G20 to ensure the availability of more grant and concessional finance, make progress on debt relief, and push for additional multilateral development bank reforms. Brazil is looking to use its G20 presidency to advance agreement on energy transition finance, having set fighting climate change as one of its priorities. The country called for a global finance governance that includes rules for financing a "just and equitable" energy transition in developing economies and for an easier access to climate funds. Brazil has also pushing for a 2pc tax on billionaires that could generate up to $250 bn/yr in revenue. By Victoria Hatherick, Jacqueline Echevarria and Caroline Varin Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Cop: Colombia’s climate plan to address fossil fuels

16/11/24

Cop: Colombia’s climate plan to address fossil fuels

Baku, 16 November (Argus) — Colombia will seek to address the "divisive issue" of "the proliferation of fossil fuels" in its next emissions reduction plan — nationally determined contribution (NDC), environment minister Susanna Muhammad told Argus, adding that it would prompt a "strong debate" in the country. Colombia's president Gustavo Petro seeks to end the country's dependence on fossil fuels, while promoting a transition to clean and renewable energy. "Of course this is a very divisive issue, especially for a country that is looking for a whole economy transition," Muhammad said on the sidelines of the UN Cop 29 climate summit in Baku. "And trying to get the whole of society and the whole of government behind that will be a strong debate." Petro ordered an end to new hydrocarbon exploration and production contracts soon after taking office in August 2022. Petroleum association ACP said that Colombia's crude output will begin declining in 2027 as reserves are insufficient to maintain output amid falling exploratory activity. Petro's ambition to phase out fossil fuels risks sacrificing key revenues for the country. But Muhammad highlighted the need to achieve an ambitious financial goal that supports a just transition in developing economies. "We cannot continue playing with the same financial rules of the game," she said. "What we are seeing at this Cop 29 is that we need solidarity and fairness in the process of financing this transition." "We said in Dubai that we would triple renewables by 2030. The question remains, who is going to triple renewables and for whom?" she said, pointing to the significant gap in renewables expansion between developed and developing economies. Countries at Cop 28 in Dubai, the UAE, last year agreed on a deal that included transitioning away from fossil fuels, tripling renewable energy capacity and doubling annual energy efficiency gains globally by 2030. Muhammad added that the country will be submitting its NDC to the UN climate body the UNFCCC by June next year because it will "go through a very strong consultation process" with different sectors of the economy. Cop parties are expected to publish their next NDCs to the Paris climate agreement — this time for 2035 — in November-February, as part of a cycle that requires countries to "ratchet up" their commitments every five years. "Our main source of emissions is deforestation, agriculture practices, especially cattle ranching," she said, adding that the government is seeking the participation of actors that are at the forefront of the climate crisis. Risky business Talking about the possibility of the US pulling out of the the Paris Agreement and Argentina's delegation exiting negotiations in Baku, she warned that by not putting the people first in the fight against climate change, leaders are risking that other "authoritarian" regimes or "climate deniers" take more power. Brazil's secretary for climate change Ana Toni said today that private companies like policy consistency and that businesses need to look at the countries that are showing climate commitment and consistency in their NDCs. "The climate crisis is irreversible, we need to focus on climate action and implementation," Toni said. By Jacqueline Echevarria Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Cop: Parties continue work on new finance goal

16/11/24

Cop: Parties continue work on new finance goal

Baku, 16 November (Argus) — Parties at the UN Cop 29 climate talks in Baku have asked for more time to work on "specific proposals" for a new finance goal, working from a draft text released yesterday , before convening for a plenary session later today, according to the summit's presidency. Country representatives are seeking to agree on a new climate finance goal for developing nations, following on from the current — broadly recognised as inadequate — $100bn/yr target. The draft text still fails to bridge the huge divide between developed and developing countries on key issues such as an amount for the goal, the contributor base and what the funds should be used for. A plenary is due to take place later today in Baku. "Over the last few days some people have doubted whether collectively we can deliver. It is time for the negotiators to start proving them wrong," Cop 29 deputy lead negotiator Samir Bejanov said. Parties continue to stick to their positions. Developed countries have still not come forward with a number for the goal, and want the contributor base broadened. Developing countries remain broadly united in calling for climate public finance of over $1 trillion/yr. Options show that developing country parties seek a new finance goal that serves mitigation — actions to reduce emissions — adaptation and loss and damage. Adaptation refers to adjustments to avoid global warming effects where possible, while loss and damage describes the unavoidable and irreversible effects of such change. Developed nations are also pushing for sub-targets of $220bn/yr for least developed countries (LDCs) and $39bn/yr for small island developing states (Sids), in which money for adaptation should come in the form of grants and highly concessional finance and funding for loss and damage "primarily in grants". The multi-layered approach in the draft, mostly supported by developed countries, does not mention loss and damage. On broadening the contributor base, it has options calling on "parties in a position to contribute" or "all capable parties" to "mobilise jointly $100bn/yr for mitigation and adaptation in developing countries by 2035. The UN climate body the UNFCCC works from a list of developed and developing countries from 1992 — delineating 24 countries plus the EU as developed — and many of these note that economic circumstances have changed in some countries, including China, over the past 32 years. China between 2013 and 2022 provided $45bn in climate finance to developing countries, equivalent to 6.1pc of climate finance provided by all developed countries in the period, according to think-tank WRI. A few options in the multi-layered approach in the draft talk about "investments", which developing countries do not support, and "investing trillions "from all sources, public, private, domestic and international". Some parties on both sides are calling for the reforms of multilateral development banks, key to leverage billions in private sector finance, to accelerate. But these issues are largely outside of the remit of the Cop, even though they may get a boost from the upcoming G20 leaders summit on 18-19 November. UN climate body chief Simon Stiell [today urged G20 leaders to make the climate crisis](https://direct.argusmedia.com/newsandanalysis/article/262963 "order of business number one". He called on G20 to ensure the availability of more grant and concessional finance, make progress on debt relief, and push for additional multi-lateral development bank reforms. Brazil is looking to use its G20 presidency to advance agreement on energy transition finance, having set fighting climate change as one of its G20 priorities. The country called for a global finance governance that includes rules for financing a "just and equitable" energy transition in developing economies and for an easier access to climate funds. Brazil has also pushing for a 2pc tax on billionaires that could generate up to $250 bn/yr in revenue. By Victoria Hatherick and Caroline Varin Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Cop: UN’s Stiell urges G20 to make climate its priority

16/11/24

Cop: UN’s Stiell urges G20 to make climate its priority

Baku, 16 November (Argus) — Leaders at next week's G20 summit should make the climate crisis "order of business number one" as negotiations on a new climate finance goal continue at the UN Cop 29 climate conference in Baku, Azerbaijan, UN climate body chief Simon Stiell said today. "Stepping it up on climate finance globally requires action both inside our Cop process and outside of it," Stiell said, and the G20's role is "mission critical". Stiell called on G20 leaders meeting in Rio de Janeiro, Brazil, on 18-19 November to ensure the availability of more grant and concessional finance, make progress on debt relief, and push for additional multi-lateral development bank reforms. Some delegates at Cop have noted that the outcome of the G20 meeting will be key for climate finance . G20 in India last year recognised the need to increase global climate investments to trillions of dollars from billions, from all sources, highlighting that $5.8 trillion-5.9 trillion is required before 2030 for developing countries to implement their climate plans. The communique had called on "parties" to set an ambitious goal from $100bn/yr floor, which developed countries committed to mobilise through 2025. Brazil this year is looking to use its G20 presidency to advance agreement on energy transition finance , having set fighting climate change as one of its G20 priorities. The country called for a global finance governance that includes rules for financing a "just and equitable" energy transition in developing economies and for an easier access to climate funds. Brazil has also pushing for a 2pc tax on billionaires that could generate up to $250 bn/yr in revenue. Stiell said today that there is a "long way to go" on talks to agree a new climate finance goal for developing nations in Baku. A round of informal consultations on a third draft text took place late yesterday , but the document was still far off striking a compromise between developed and developing countries on central aspects including the amount of funds to be given, which countries should contribute, and how the money should be used. By Victoria Hatherick Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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