Will Venezuela’s Opposition Lose Control of Citgo?
A U.S. district judge in New York this month ruled that holders of Venezuelan state oil company PDVSA’s 2020 bonds have valid claims over the firm’s U.S. based refiner, Citgo, a decision that puts the Venezuelan opposition’s control over the country’s most valuable foreign asset at risk, analysts say. The ruling came weeks after the U.S. Treasury Department extended a measure blocking bondholders from seizing shares in Citgo’s parent company through Jan. 19, one day before the U.S. presidential inauguration. To what extent does the latest ruling threaten the opposition’s control over Citgo? How might political factors, including Venezuela’s December legislative elections and the U.S. presidential vote, play a role in who manages Citgo in the near future? Are the issues likely to be resolved soon, or will Citgo’s future continue to be in a legal limbo?
Francisco Monaldi, fellow in Latin America energy policy at Rice University’s Baker Institute and lecturer in energy economics at the Center of Energy Studies: “Despite the court decisions, the U.S. government signaled a strong commitment to protect Citgo in both the Crystallex and PDVSA 2020 legal cases, which indicates that the U.S. government is likely to continue to renew the measure blocking the asset seizure. It makes political and strategic sense. If Citgo is lost, Maduro would obtain a political victory, despite being squarely responsible for the difficult situation that the company is in. It would be a political setback for the U.S. administration, reversing one of the few tangible results of the sanctions to Venezuela and the policy of recognizing Guaidó. Moreover, selling Citgo today would be…”Read More
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