Settlement Saves CITGO From Seizure

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CITGO settlement

Settlement Saves CITGO From Seizure

11/26/2018

HOUSTON — Venezuela retains control of CITGO with a $1.4-billion settlement.

Citing documents, The Associated Press reported Venezuela began paying off $1.4 billion that a panel said was owed to the Canadian mining firm Crystallex. The move lets the country keep its U.S.-based CITGO refineries.

Crystallex has been trying to collect a $1.4-billion award in compensation following a decade-long dispute over Venezuela's 2008 nationalization of Crystallex gold mining operation in the South American nation.

As Convenience Store News previously reported in August, Judge Leonard P. Stark of the United States District Court in Delaware approved a request by Crystallex to attach shares in a U.S. subsidiary of Venezuelan state oil company Petróleos de Venezuela S.A. (PDVSA) that indirectly controls refiner CITGO Petroleum Corp.

Though he approved the request, Stark held off issuing a writ to attach seizure order until the parties advised him on how to proceed. The judge also let parties propose a redacted ruling before he issued a public decision.

According to The Wall Street Journal, under the settlement, Crystallex agreed to suspend a planned auction of shares in CITGO's parent company.

Crystallex Chief Executive Robert Fung said Sunday that Venezuela had already paid $500 million in cash and liquid securities. The country is required to post collateral by Jan. 10 to secure the remainder of what it owes on the judgement.

If the collateral isn't posted, Crystallex could resume the auction process, the news outlet reported.

Venezuela agreed to pay the rest of the judgment by early 2021 in installments, according to court papers filed in Crystallex's Canadian bankruptcy proceeding.

Houston-based CITGO has three refineries in Louisiana, Texas and Illinois in addition to a network of pipelines. It is valued at $8 billion.