Will this be an American court going up against one of Putin's Oligarcs?
U.S. Judge Allows Crystallex Claim To Citgo Shares
Venezuela creditors eye oil assets over unpaid debt Venezuela’s sliding oil exports a boon for prices Venezuela national oil company sued in New York fast
FT Petroleos de Venezuela SA US judge allows Crystallex to seize Venezuela’s Citgo Decision over US-based oil refiner is another financial blow to cash-strapped nation
Venezuela’s efforts to stay afloat financially have suffered another blow after a judge in the US gave a Canadian mining company permission to seize the shares of the Venezuelan holding company that owns Citgo, a US oil refiner.
The judge on Thursday ruled that Canada’s Crystallex has the right to claim the shares of PDV Holding Inc to compensate it for around $1.4bn it is owed by the Venezuelan state.
The case dates back to 2011 when Venezuela nationalised Las Cristinas, a gold reserve owned by Crystallex. The Canadian company took Venezuela to the World Bank’s international arbitration tribunal ICSID and won, but Venezuela refused to pay up.
Crystallex therefore went after Citgo as compensation, arguing that PDV Holding Inc, which is owned by Venezuela’s state-owned oil company PDVSA, is essentially an “alter ego” of the Venezuelan state.
The case is one of many arbitration cases involving Venezuela and foreign companies.
Earlier this year US oil company ConocoPhillips tried to seize PDVSA assets in the Caribbean, including products stored at its Isla refinery on the island of Curaçao.
Citgo is the jewel in the crown of PDVSA’s foreign holdings. The Houston-based company not only operates gas stations but has three refineries in the US with a capacity to refine 750,000 barrels of crude a day.
It also produces lubricants which are vital for Venezuela’s refining of its heavy crude.
Ángel Alvarado, a Venezuelan opposition member of Congress and an economist, said Thursday’s decision was an even bigger blow to PDVSA that the ConocoPhillips move “because it will seriously affect the import of diluents from the US, one of the raw materials for the extraction of heavy and extra-heavy crude.”
In his brief ruling, Judge Leonard Stark of the Delaware District court did not give his reasoning. His full decision is under seal.
“Crystallex and PDVSA shall meet and confer and, no later than August 16, 2018, submit a joint status report providing their position(s) as to how this case should now proceed,” he said.
Link: https://www.ft.com/content/
Rosneft May Challenge Crystallex Claim To Citgo Shares
Rosneft has asked a U.S. federal court to establish “a robust appraisal and sale process” of Citgo shares following Canadian miner Crystallex’ win at court against the parent company of Citgo, PDVSA, Argus Media reports citing documents submitted by Rosneft to court.
"Such a course of action is particularly appropriate under the circumstances given the multitude of parties and interests potentially affected by a sale of PdVH," the documents said.
Crystallex was ruled the winner in a long-running case against Venezuela, which it has sued over the forced nationalization of its assets by the Hugo Chavez government. A U.S. federal judge last week awarded the miner the right to approach Venezuela’s U.S. oil unit, Citgo, to seek its compensation of US$1.4 billion.
Yet the Russian state company has priority rights over 49.9 percent in Citgo. PDVSA used the stake as collateral for a US$1.5-billion loan provided by Rosneft in 2016.
The move at the time sparked a lot of negative comments in the United States, with some legislators worried that Rosneft could at some point take control over the U.S. company. The rest of the Citgo stock has been pledged as collateral to a PDVSA bond issue that matures in two years, Argus Media notes.
Now Crystallex wants to take control over the refiner, which operates a refinery network with a daily capacity of 750,000 bpd, and then sell the stock on to another investor or investors to get its US$1.4 billion.
The sum was awarded to the Canadian miner as compensation for the forced nationalization of its operations in Venezuela by the Hugo Chavez government.
At the time, the Associated Press noted that the ruling by Chief Judge Leonard P. Stark is unique: government assets such as Citgo’s parent, PDVSA, are as a rule protected from lawsuits targeting a state.
Yet in Stark’s ruling, the judge said that Venezuela had blurred the lines between the government and the state oil firm, with a military official at the helm of PDVSA.
By Irina Slav for Oilprice.com
Link: https://oilprice.com/Latest-
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