USA Extends Protection Over Citgo for One Year
The U.S. Treasury Department banned transactions of a key bond issued by Venezuela’s state-owned oil company for one year, the longest since it first stepped in to shield its U.S.-based refining arm from creditors, amid its economic downfall and political crisis.
U.S. administrations under Donald Trump and now Joe Biden, had previously extended the ban for shorter periods -- 90 days each -- consecutively, as claims from bondholders and creditors over Petroleos de Venezuela SA’s main asset in the U.S., Citgo Petroleum Corp., piled up in courts.
Venezuela’s opposition, which under Juan Guaido has sought to avoid losing control of Citgo while mounting a challenge to the country’s socialist regime, celebrated the move.
“This is the largest license extension granted so far to protect and preserve Citgo,” said Guaido’s representative in the U.S., Carlos Vecchio, on Twitter. “We thank the Joe Biden administration for this important step in favor of the Venezuelan people.”
The new one-year ban took force Thursday with the Treasury Department’s Office of Foreign Assets Control issuance of a 5I license that will be in effect until Jan. 20, 2023. From then on, bondholders of the PDVSA 8.5% note due 2020, backed by half of Citgo’s shares, will be allowed to engage in transactions to collect on the collateral unless the Treasury Department decides to extend the prohibition.
Venezuela defaulted on its debt in 2017. Renegotiation efforts are mainly blocked by U.S. sanctions that forbid any dealings with the Venezuelan government. Other creditors, such as mining company Crystallex International Corp. and oil company ConocoPhillips, are also after the sale of Citgo to satisfy awards they won against Venezuela for the expropriation of their assets in the country.
“This move certainly makes it clear that the U.S. government still has Guaido’s back and will give him another chance at negotiating with it’s main creditors,” said Guillermo Guerrero, a strategist at London-based Emfi Group Ltd. “The question is whether Guaido can make an offer that is interesting enough to entice bondholders.”
What do you think? We’d love to hear from you, join the conversation on the
Rigzone Energy Network.
The Rigzone Energy Network is a new social experience created for you and all energy professionals to Speak Up about our industry, share knowledge, connect with peers and industry insiders and engage in a professional community that will empower your career in energy.
- Japan Failing to Meet Corporate Demand for Clean Power: Amazon
- Russian Navy Enters Warship-Crowded Red Sea Amid Houthi Attacks
- Oman Sees Increasing Ship-to-Ship Transfers of Russian Oil Bound for India
- Ithaca Energy Studies Deal for Eni's UK Upstream Assets
- New China Climate Chief Says Fossil Fuels Must Keep a Role
- Falcon Oil Declares Commercial Flow Test Results for Shenandoah Well
- UK Oil Regulator Publishes New Emissions Reduction Plan
- Japan Failing to Meet Corporate Demand for Clean Power: Amazon
- PetroChina Posts Higher Annual Profit on Higher Production
- McDermott Settles Reficar Dispute
- Macquarie Strategists Expect Brent Oil Price to Grind Higher
- US, SKorea Launch Task Force to Stop Illicit Refined Oil Flows into NKorea
- Russian Navy Enters Warship-Crowded Red Sea Amid Houthi Attacks
- Pennsylvania County Joins List of Local Govts Suing Big Oil over Climate
- Equinor Makes Discovery in North Sea
- Standard Chartered Reiterates $94 Brent Call
- India Halts Russia Oil Supplies From Sanctioned Tanker Giant
- DOI Announces Proposal for Second GOM Offshore Wind Auction
- Centcom, Dryad Outline Recent Moves Around Red Sea Region
- PetroChina Set to Receive Venezuelan Oil
- Czech Conglomerate to Buy Major Stake in Gasnet for $917MM
- US DOE Offers $44MM in Funding to Boost Clean Power Distribution
- Oil Settles Lower as Stronger Dollar Offsets Tighter Market
- UK Grid Operator Receives Aid to Advance Rural Decarbonization
- Chinese Mega Company Makes Major Oilfield Discovery
- VIDEO: Missile Attack Kills Crew Transiting Gulf of Aden
- Norway Regulator Blasts Proposal to Halt New Oil and Gas Permits
- Chinese Mega Company Makes Another Major Oilfield Discovery
- What Is the Biggest Risk to Offshore Oil and Gas Personnel in 2024?
- Vessel Sinks in Red Sea After Missile Strike
- Exxon Rights in Stabroek Do Not Apply to Hess Merger with Chevron: Hess
- Analysts Reveal Latest Oil Price Outlook Following OPEC+ Cut Extension
- Equinor Makes Discovery in North Sea
- Standard Chartered Reiterates $94 Brent Call