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Venezuelan opposition on brink of losing Citgo

  • Spanish Market: Crude oil, Oil products
  • 11/09/20

Citgo, the most potent symbol of the US-backed Venezuelan opposition's governing aspirations, is slipping closer to a watershed bond foreclosure.

The US refiner is a subsidiary of Venezuela's national oil company PdV that is in default on a 2020 bond, fruit of a controversial 2016 swap issuance. Although Venezuela and PdV have at least $150bn in unpaid debts around the world, this particular bond stands out for its collateral: 50.1pc of the shares in Delaware-based Citgo Holding.

The closely watched 2020 8.5pc interest bond matures on 27 October, and bondholders that include prominent institutional investors such as Ashmore, Fidelity and T Rowe Price are owed around $1.8bn-$1.9bn on that date.

The mainstream opponents of Venezuelan president Nicolas Maduro's government have controlled Citgo since early 2019, after the US imposed oil sanctions to try to oust him in favor of National Assembly speaker Juan Guaido. Although Guaido's US-supported parallel administration made a May 2019 coupon payment of $72mn, it sued to invalidate the bonds instead of making a subsequent $914mn payment of principal and interest last October. The lawsuit coincided with a US Treasury block against bondholders exercising their right to Citgo as collateral.

Guaido's representatives argue that a New York federal court should invalidate the bond because it was never approved by the National Assembly in Caracas.

The argument has gained no traction, partly because it would set a precedent for other foreign issuers to walk away from their US obligations based on political changes at home, debt experts say.

This is why a pending US government opinion ahead of the next New York court hearing on 25 September is unlikely to transmit more than nominal support for keeping Citgo in the Venezuelan opposition's hands.

Bondholders blocked

For now, the bondholders remain blocked from enforcing the lien on Citgo by the ongoing suspension of General License 5, a provision of US sanctions that freed them to act on the bond conditions.

The suspension has been rolled over every 90 days since it was first issued in October 2019, and it is next due to lapse on 20 October, the eve of the bond maturity — as well as the pivotal 3 November US elections in which Donald Trump is seeking another four-year term.

The Venezuelan cause is a key Trump campaign theme because of its perceived appeal to a subset of Latino voters in the swing state of Florida. As a result, the US Treasury Department's Office of Foreign Assets Control (Ofac), the agency that administers sanctions, seems likely to renew the suspension for another three months rather than expose the mainstream Venezuelan opposition to another embarrassing defeat. That brings the next expiry right up to the January presidential inauguration — either of Trump or his rival Joe Biden. By then, Venezuela will have lost its campaign value, making it easier for the US to let the bondholders foreclose on Citgo.

Whether this happens in October or January, the judicial die seems to have been cast in favor of the bondholders rather than Crystallex, the former Canadian mining company now controlled by New York hedge fund Tenor Capital Management that is challenging Venezuela in a parallel Delaware federal court case.

Crystallex is pressing to take over Citgo Holding's parent PdV Holding as compensation for the seizure of its Venezuelan gold mining assets a decade ago. A win for Crystallex, based on an alter ego argument that Citgo is a stand-in for the Republic of Venezuela, would still require an Ofac license to execute. The bondholders' case, which is based on an explicit pledge, is more straightforward than the claim of Crystallex, or others such as ConocoPhillips seeking Citgo shares to satisfy international arbitration awards against Venezuela.

Sealed fate

The loss of Citgo could hasten the disintegration of the Venezuelan opposition, which is already sharply divided over whether to participate in 6 December National Assembly elections. This week another member of Guaido's team of exiled technocrats, parallel PdV board chair Luis Pacheco, made public his plan to step down after key court hearings over the next three weeks. He and other former Guaido associates have previously warned that Citgo is becoming harder to defend.

One last option for the opposition would be to enter Citgo's two parent companies into Chapter 11 bankruptcy. But the lengthy process would bear the same political price for Guaido of effectively losing an asset that he had pledged to protect. If he is pushed aside in the assembly elections as well, Maduro will have succeeded in crushing his main rival and surviving the sanctions that have kept Venezuelan oil out of the US market for close to two years.


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27/02/25

Казахстан договорился о поставках нефти в Венгрию

Казахстан договорился о поставках нефти в Венгрию

Riga, 27 February (Argus) — Казахстан и Венгрия договорились начать тестовые поставки казахстанской нефти по трубопроводу Дружба в 2025 г. Договоренности о прокачке сырья в Венгрию были достигнуты 17 февраля на встрече министра энергетики Казахстана Алмасадама Саткалиева с министром внешнеэкономических связей и иностранных дел Венгрии Петером Сийярто, сообщило Минэнерго Казахстана. Казахстанские экспортеры с 2023 г. поставляют сорт Kebco по трубопроводу Дружба в Германию. В январе прокачка в этом направлении возобновилась после месячного перерыва и составила 262 тыс. т, сообщили участники рынка. В декабре отгрузки в эту страну приостанавливались по техническим причинам, вследствие чего отгрузка декабрьских партий была перенесена на начало января. ________________ Больше ценовой информации и аналитических материалов о рынках нефти и нефтепродуктов стран Каспийского региона и Центральной Азии — в еженедельном отчете Argus Рынок Каспия . Вы можете присылать комментарии по адресу или запросить дополнительную информацию feedback@argusmedia.com Copyright © 2025. Группа Argus Media . Все права защищены.

Trump to revoke Chevron's Venezuela oil license: Update


26/02/25
26/02/25

Trump to revoke Chevron's Venezuela oil license: Update

Updates with reaction from Chevron, other details. Washington, 26 February (Argus) — US president Donald Trump said today he will revoke a 2022 Venezuela sanctions waiver, most likely referring to Chevron's authorization to lift crude cargoes from its joint venture with Venezuelan state-owned PdV. Trump did not explicitly reference Chevron, but his description of the waiver from Venezuela sanctions he said he was revoking matches the US major's authorization date and terms. The Chevron authorization would not be renewed on 1 March, Trump said. "We are aware of today's announcement and are considering its implications," Chevron said, adding that it "conducts its business in Venezuela in compliance with all laws and regulations, including the sanctions framework provided by US government." The 26 November 2022 authorization for Chevron was auto-renewed every month and allowed the company to operate in Venezuela for a six-month period after each renewal. Since Trump noted that he would not renew the license on 1 March, the terms of that license in theory allow Chevron to continue operations in Venezuela until 1 August. Chevron expects the six-month wind-down period to remain in place, a source close to the company's Venezuela operations said. The US Treasury Department has yet to confirm details of the new Venezuela sanctions regime as described by Trump. Former president Joe Biden's administration allowed Chevron to resume cargo loadings from Venezuela, only for imports into the US, in October 2022, as part of a deal with Venezuelan president Nicolas Maduro's government to encourage holding free elections. The US imported 222,000 b/d of crude from Venezuela in January-November 2024, US Energy Information Administration data show. While insignificant for total US crude imports, Venezuela cargoes amounted to about 10pc of Chevron's global liquids output as of last year. Chevron's Venezuela presence did not result in major financial gains for Caracas. But it allowed PdV to stabilize and then grow Venezuela's crude output. Venezuela's crude production, including liquids and condensates, held at about 1.04mn b/d in January, according to PdV. Chevron was among a handful of western companies allowed to draw crude cargoes from Venezuela, but on terms that precluded direct cash payments to PdV. Independent refiners in China are the primary customers for Venezuelan Merey crude, imported through a network of ships, agents and brokers established to circumvent US sanctions. The scheme resulted in significant discounts for Chinese buyers of Merey, which traded at discounts ranging from $6.50-7/bl against May Ice Brent, for March arrival. Migration pipeline The Trump administration appeared willing to retain the Chevron authorization as long as the Maduro government cooperated on accepting Venezuelan nationals deported from the US. Trump's envoy Ric Grenell traveled to Caracas last month to discuss cooperation on migrants, and he suggested over the weekend that the US was no longer interested in a change of Venezuela's government. But Trump said today that the Maduro government "has not been transporting the violent criminals that they sent into our Country (the Good Ole' U.S.A.) back to Venezuela at the rapid pace that they had agreed to." Trump's Republican allies in Congress hailed his decision, describing the Chevron authorization as a "Biden oil deal". The Republicans hold a narrow 218:215 majority in the US House of Representatives, with two vacant seats in Florida that in November elected Republican lawmakers who since resigned. US relations with Venezuela are a key political issue in Florida, which is home to many Americans of Cuban and Venezuelan descent. Caracas blasted Trump's decision, with Venezuela's vice-president Delcy Rodriguez saying in a social media post that "these kinds of failed decisions prompted the migration from 2017 to 2021 with the widely known consequences." PdV and Venezuela's oil ministry declined to comment. By Haik Gugarats and Carlos Camacho Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Canada-Mexico tariff threat leaves industry guessing


26/02/25
26/02/25

Canada-Mexico tariff threat leaves industry guessing

Calgary, 26 February (Argus) — Threatened US tariffs on Canadian and Mexican imports have thrown North American commodity markets into turmoil, both because of the scope of the proposals and the lack of details on how they might work. The information vacuum created by the US in between declarations from President Donald Trump has left commodity producers, consumers and traders unsure how to prepare. The Treasury Department and Customs and Border Control are not providing guidance on how a 10pc tariff on Canadian energy and 25pc tariff on all Mexican imports — currently set to come into effect on 4 March at 12:01am ET — would actually be administered. Reaction to the unknowns have varied from one company and politician to the next. Below are some of their comments: Refining: "There is no easy, fit-for-purpose replacement for this [Canadian] crude oil," the American Fuel and Petrochemical Manufacturers (AFPM) , which advocates for many US refiners, said on 27 November. Western Canadian crude will continue to flow to US refiners, but at a greater discount if President Donald Trump enacts tariffs on imports from that country, Phillips 66 executive vice president of commercial Brian Mandell said on 31 January. But "crack margins will also have to do some work" in the Rocky Mountain and midcontinent regions, where refiners have fewer alternative supplies. Tariffs would lead to price increases and most of these "will ultimately be borne by the producer" and to a lesser extent the consumer, said Marathon Petroleum chief executive Maryann Mannen said on 4 February. If threats for US tariffs on Canadian crude were to eventually go through, the cost would be split between producers, refiners and customers, Delek chief executive Avigal Soreq said on 6 February. It is a dynamic scenario and "very difficult to predict what will happen to margins on the northern tier," BP chief executive Murray Auchincloss said on 11 February. The tariffs would cause a sizable disruption and "have some impact on throughput," US independent refiner PBF Energy chief executive Matthew Lucey said on 13 February. Switching to alternative crudes would lead to lower yields of gasoline, diesel and other fuels because refineries are optimized around a certain type of crude, he said. US independent refiner HF Sinclair has "the ability to lighten up" and switch to alternative crudes if impending US tariffs on Canada go into effect next month, HF Sinclar commercial vice president Steven Ledbetter said on 20 February. Upstream: "A 25pc tariff on oil and natural gas would likely result in lower production in Canada and higher gasoline and energy costs to American consumers while threatening North American energy security," Canadian Association of Petroleum Producers (CAPP) president Lisa Baiton said on 26 November. "Canada's regulatory uncertainty, negative investment climate and the continued implementation of harmful policies has positioned Canada in a weak negotiating position with a lack of diversity in market access," said the Explorers and Producers Association of Canada (EPAC) on 16 January. "We don't know what's going to happen with tariffs and I don't have any unique insight," Imperial Oil chief executive Brad Corson said on 31 January. "I'm hopeful that as we move forward, diplomacy will prevail and we will end up with no tariffs, no restrictions on energy flow." "All the work we've been doing over the last eight years has been to drive our production to the low end of the cost of supply curve," ExxonMobil chief executive officer Darren Woods said on 31 January. "None of that's going to change with tariffs." "I would say that I don't know that anyone on the planet knows exactly what's going to happen on tariffs," Suncor chief executive Rich Kruger said on 6 February. If tariffs were to be implemented, it is "pretty difficult" to say exactly who would carry the burden -- producers or buyers, said Andy O'Brien, ConocoPhillips senior vice president for strategy, commercial, sustainability and technology on 7 February. "The refiners in the Midwest and the Rockies have less options to substitute versus, say, the Gulf coast or the west coast refiners," O'Brien said. "It's not really clear to us who's going to pay which portion of the tariff," said Cenovus chief executive Jon McKenzie on 20 February. "If we are in a world, unfortunately, in March, where tariffs do come, we will watch those price signals and react accordingly." Cenovus executive vice president of commercial Geoff Murray expects that tariffs would drive "as much volume as possible" through the 890,000 b/d Trans Mountain system to Canada's west coast, destined for global markets rather than California, which currently takes about half of the pipeline's exported volume. Midstream: "If [the tariffs] do come in . . . that product is still going to be needed," said Enbridge chief executive Greg Ebel on 6 January. "It is not my preferred route, but the product will flow." Trans Mountain has seen a "flurry of activity" in booking westbound pipeline capacity since US president Donald Trump's administration announced its intent to slap tariffs on imports, said Trans Mountain senior director of business development Jason Balasch on 7 February. "The tariffs have opened all level of government's eyes to talk of expansions." "We fully expect that under all Canada-US trade relations outcomes, Canadian oil will continue to flow south," Enbridge chief executive Greg Ebel said on 14 February. "We've got tariff concerns out there, but there's such a hard wiring of the energy system in North America, we just don't see that as a material impact." "We thought that was a little bit further out," Gibson Energy chief executive Curtis Philippon said of a potential expansion of tankage near the inlet of the Trans Mountain pipeline system on Canada's west coast on 19 February. The midstream company commissioned two 435,000 bl tanks at the Edmonton terminal in December and tariff threats seem to have expedited talk on adding two more. Trading: "The fact that the initial tariffs around Canada and Mexico were so punitive at 25pc, how someone handles that risk ... is extremely difficult," said Equinor vice president of crude trading and refinery optimization Simon James on 6 February. "I think that's something the market is starting to work through and I don't think there's a good answer yet." "For us as traders, it also creates market opportunity, but it certainly does create a lot of market uncertainty," said Chevron vice president of crude supply and trading Barbara Harrison on 6 February. "Already today, traders and people who are trying to connect the dots, are looking into how they should change their buying patterns," SOCAR chief trading officer Taghi Taghi-Zada said on 6 February. While the actual imposition of tariffs would be an important milestone, he said, the fact people are speaking about them with confidence has already affected the markets. Politicians: "[The federal government] will have a national unity crisis on their hands at the same time as having a crisis with our US trade partners," Alberta premier Danielle Smith said on 13 January in response to the suggestion Canada was considering cutting off energy flows to the US in retaliation to tariffs. "Everything is on the table," Canadian prime minister Justin Trudeau said of his tariff retaliation plans on 15 January. "The point in [Canada's] response is to apply political pressure," said Canada's minister of energy and natural resources Jonathan Wilkinson on 15 January. Canada will likely focus on goods that are "important to American producers," but also those for which Canada has an alternative. Alberta premier Danielle Smith on 16 January called on Canada to "immediately start construction on the Northern Gateway and Energy East pipelines" to decrease the country's reliance on US customers in the wake of threatened tariffs by president-elect Donald Trump. There is no active proposal for either pipeline. "We've been here before," said Canadian prime minister Justin Trudeau on 21 January, citing Trump's first term in office that challenged the trading relationship both sides were able to work through. "Our focus is remaining calm." "If the president does choose to implement any tariffs against Canada, we are ready with a response," said Canadian prime minister Justin Trudeau on 31 January. "A purposeful, forceful, but reasonable, immediate response." "US-based businesses will now lose out on tens of billions of dollars in new revenues," Ontario premier Doug Ford said on 3 February as he banned US companies from provincial contracts. "They only have President Donald Trump to blame." "[Heavy Canadian oil] is by far the most affordable option for American companies and consumers, and it enables the export of US light crude to countries around the world, creating additional profit for American companies but also creating additional tools to be used in the context of geopolitics," said Canada's energy and natural resources minister Jonathan Wilkinson on 4 February. "In Canada, this has caused some reflection on whether perhaps in some areas we are too dependent on infrastructure in particular that flows only through the United States ... certainly in the areas like oil, we flow almost all of it this way," said Canada's energy and natural resources minister Jonathan Wilkinson on 4 February. "Working families across the country are being put in the crosshairs of Trump's policies with our trade partners," Illinois governor JB Pritzker said on 10 February. "Get the Keystone pipeline in place. Now whether he wants, the president, wants to charge tariffs to Canada, that's something that can be negotiated deal by deal," US representative Randy Weber (R-Texas) said on 25 February. Analysts: The US' trade deficit with Canada is largely a result of America's thirst for energy and should not be confused with a "subsidy", economists at TD Bank said on 21 January. "I don't think Trump actually wants tariffs on Canada or Mexico," said Kpler economist Reid I'Anson on 5 February, noting Trump was quick to get on the phone with the two countries, but not so much with China. "The extent of the price impact depends on one's locations, but certainly seems to me that the consumer will be paying more for energy," said Lipow Oil Associates president and industry analyst Andrew Lipow on 27 November. Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Illinois River lock reopening delayed: Corps


26/02/25
26/02/25

Illinois River lock reopening delayed: Corps

Houston, 26 February (Argus) — The US Army Corps of Engineers (Corps) delayed the reopening of the Lockport Lock along the Illinois River by over a month after finding significant cracks in the lower gate walls. The Corps now estimates the lock to resume operations between 30 April and 6 May at the earliest. The Lockport Lock was previously scheduled to reopen on 25 March , after the two gates on the upper end of the lock were replaced. When the Corps dewatered the lock chamber earlier this month, severe cracks were found in both the lower gates. The Lockport Lock grants access to major trading hubs Chicago, Illinois, and Burns Harbor, Indiana, at the end of the Illinois River. The lock has been closed since 28 January. Major barge carriers had already planned transit routes for the previous reopening timeline of the Lockport Lock. These dates have been paused until April, instead of late February. The delayed timeline will prolong shipment of major products such as metals, asphalt, petcoke, fertilizer and biofuels. Another 5-6 weeks of work will be required for replacement of the lower gate walls, said the Corps. Both lower gates need to be pulled, and there are no spare castings for the Lockport gates, incurring an extended timeline. A different heavy lift crane must be brought in and funding must be acquired for the additional interim and permanent repairs, said the Corps. Work has already begun for replacement of the upper gates, including bulkheads, rebar installation and upper gates pulled into the chamber. By Meghan Yoyotte Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Trump to revoke Chevron's Venezuela oil license


26/02/25
26/02/25

Trump to revoke Chevron's Venezuela oil license

Washington, 26 February (Argus) — US president Donald Trump said today he will revoke a 2022 authorization for Chevron to lift crude cargoes from its joint venture with Venezuelan state-owned PdV. Trump did not explicitly reference Chevron, but his description of a waiver from Venezuela sanctions he said he was revoking matches the US major's authorization date and terms. The Chevron authorization would terminate on 1 March, Trump said. The company was not immediately available to comment. Former president Joe Biden's administration allowed Chevron to resume cargo loadings from Venezuela, only for imports into the US, in October 2022, as part of a deal with Venezuelan president Nicolas Maduro's government to encourage holding free elections. The US imported 222,000 b/d of crude from Venezuela in January-November 2024, US Energy Information Administration data show. While insignificant for total US crude imports, Venezuela cargoes amounted to about 10pc of Chevron's global liquids output as of last year. Chevron's Venezuela presence did not result in major financial gains for Caracas. But it allowed PdV to stabilize and then grow Venezuela's crude output. Venezuela's crude production, including liquids and condensates, held at about 1.04mn b/d in January, according to PdV. The Trump administration appeared willing to retain the Chevron authorization as long as the Maduro government cooperated on accepting Venezuelan nationals deported from the US. Trump's envoy Ric Grenell traveled to Caracas last month to discuss cooperation on migrants, and he suggested over the weekend that the US was no longer interested in a change of Venezuela's government. But Trump said today that the Maduro government "has not been transporting the violent criminals that they sent into our Country (the Good Ole' U.S.A.) back to Venezuela at the rapid pace that they had agreed to." The US Treasury Department has yet to confirm details of the new Venezuela sanctions regime as described by Trump. By Haik Gugarats Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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