A United States (USA) appeals court rejected on Friday, July 7, a motion by Venezuela to prevent six companies from joining a planned auction of shares in one of the parent companies of Citgo Petroleum with which it seeks to enforce sentences. for breaches and expropriation of assets
Meanwhile, the opposition is preparing a proposal that would bring thousands of barrels of oil to the United States (USA) to settle defaults. The refusal of the US court gives the green light to the auction so that companies can get hold of Citgo shares.
A US appeals court on Friday rejected a motion by Venezuela to prevent six companies from joining a planned auction of shares in one of Citgo Petroleum’s parent companies that seeks to enforce judgments for defaults and expropriation. of assets.
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The decision allows the six companies to move forward with their combined claims of around $3 billion against Petróleos de Venezuela (PDVSA) in federal court in Delaware. The court is in the initial phase of preparing an auction that could start in September.
“For the second time in five years, we conclude that PDVSA is Venezuela’s alter ego, and we will affirm the District Court’s denial of sovereign immunity to PDVSA,” the three-judge panel ruled.
The companies had won conditional liens in a federal case in which the judge has already approved a process to auction shares and thereby pay a judgment of 970 million dollars won by the Crystallex mining company.
Since March, creditors, including a unit of OI Glass Huntington Ingalls Industries, ACL1 Investments, Koch Minerals, and mining companies Rusoro Mining and Gold Reserve, have received rights to take shares in PDV Holding, one of the company’s parents. refining owned by Venezuela Citgo Petroleum.
Opposition proposal for the US
Venezuela’s opposition is drawing up a proposal to redirect some 200,000 barrels a day of its exports to China to the United States for a trust to pay creditors claiming the South American nation’s foreign assets.
Venezuela is waging a battle in the United States courts against bondholders and creditors who are demanding more than 20 billion dollars in breaches and expropriations, an amount that exceeds the value of its foreign assets.
The latest proposal to be discussed with the Venezuelan government calls for the creation of a trust that would redirect to the United States a portion of Venezuela’s oil exports that are currently sold at a discount to China, said Horacio Medina, head of a board that oversees the Venezuela’s foreign oil assets.
A negotiating team, representing Venezuela, began formal talks at the end of 2022 with some creditors, including the mining company Crystallex and the oil producer ConocoPhillips, seeking to avoid the loss of its most important asset abroad, the refiner Citgo Petroleum, which is based in Houston, at a share auction, which could start as early as September.
But it is not clear if the latest opposition plan will advance because it still needs an agreement with the government of President Nicolás Maduro and the green light from Washington, which in 2019 imposed sanctions on the state oil company PDVSA.
Last year the government of Nicolás Maduro and the opposition held talks for the creation of a humanitarian fund, which would be financed with money from Venezuela frozen in accounts abroad. The proposal has stalled in a context of slow negotiations between the parties on elections and reforms in the country.
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