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A Tale of Setbacks as Venezuela’s Citgo Heads to US Auction

For the past four years, the United States protected oil refiner Citgo Petroleum from creditors seeking to seize Venezuela’s foreign crown jewel for billions of dollars in claims. But on Monday, a U.S. judge will kick off an auction expected to place the Houston-based company in the hands of rivals or investors.

The auction could start a new chapter for the 113-year-old company, which has been owned by Venezuela for almost 40 years. An unknown is whether Biden administration’s decision last week to ease energy sanctions on Venezuela could allow the country to repay creditors and end the lawsuit.

A senior U.S. State Department official in Washington last week said in a briefing the sanctions easing should not affect the auction. The U.S. separately extended Citgo’s protection from creditors until January.

Reuters has tracked the court case for more than a year and has spoken with nearly two dozen people including employees, investors, board members, attorneys, U.S. officials, rivals and creditors involved with the company. The story they tell is one of miscalculations and a federal judge determined to make Venezuela pay its debts.

Citgo likely will end up next year in the hands of one or more of the largest refiners operating in the U.S., potentially leaving Venezuela with nothing, according to the people most closely involved.

Washington and Venezuela’s political opposition wanted Citgo to anchor the country’s economic future under a democratically elected government. But both have failed to break Venezuelan President Nicolas Maduro’s grip on power since a disputed 2018 re-election.

Source : Reuters