Salem Radio Network News Sunday, January 16, 2022


Exclusive: Citgo boards in last-ditch talks with Washington to keep creditors at bay

By Marianna Parraga and Matt Spetalnick

HOUSTON/WASHINGTON (Reuters) – The supervisory boards of Venezuela-owned Citgo Petroleum, racing to stave off a breakup of the eighth largest U.S. oil refiner, have held talks with U.S. officials in Bogota, Colombia, seeking to extend Washington’s protection while Citgo pursues negotiations with creditors, Reuters has learned.

Citgo is running out of time to achieve agreements to remain in Venezuelan hands. The refiner is caught between infighting among political groups that control its boards and a U.S. federal court that is ready to begin a forced auction as early as next month.

During the Bogota talks, which have not been publicly disclosed, Venezuelan representatives raised the need for extending Citgo’s protection. U.S. officials then requested a formal strategy for managing Venezuela’s foreign assets in the coming year, three people familiar with the meeting said.

A U.S. official confirmed the encounter on condition of anonymity.

A forced sale would take away Venezuela’s prized foreign asset. Citgo has already suffered steep losses, faced a U.S. probe into prior management and struggled to replace oil supplies cut off by U.S. sanctions on its parent, Venezuelan state oil firm PDVSA.

Since September, Citgo’s supervisory boards have pursued talks with creditors on payment proposals drafted by JPMorgan Chase & Co as Venezuela-linked debts have weighed.

But so far, talks have not been approved by Venezuela’s fractious National Assembly, which controls the supervisory boards. The opposition-led Assembly has often failed to agree on how to manage the foreign assets.

“We have to do something,” said Horacio Medina, president of the PDV ad-hoc board over Citgo, after meeting with U.S. officials in Bogota on the proposal this month. “The board wants to sit at the negotiation table with creditors. The current environment is appropriate for that.”

The U.S. Treasury Department so far has kept Citgo, a symbol of Venezuela’s fading international reach, out of the hands of creditors who won multibillion-dollar arbitration awards.

The U.S. protection is set to end in January, which could trigger an auction by the U.S. District Court in Delaware overseeing the most pressing claim on Citgo’s assets.

(By Marianna Parraga in Houston and Matt Spetalnick in Washington; editing by Gary McWilliams and David Gregorio)


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