The United States will not block the court-ordered sale of shares in Citgo Petroleum Corp.’s parent company, PDV Holding, to pay creditors who have demanded payment from the Venezuelan state.
U.S. Justice Department officials said in a letter to a court-appointed representative that the government would not take enforcement action, paving the way for creditors such as Canadian mining company Crystallex International Corp. can collect their legal claims on the sale of the refinery.
Houston-based Citgo is one of Venezuela’s largest foreign assets, and sanctions had previously blocked any share transfers. The judicial officer overseeing the sale, known as a special master, had sought clarification from the Treasury Department’s Office of Foreign Assets Control about the sale in the case pending in US federal court in Delaware.
“In these circumstances, OFAC will not take enforcement action against persons or entities for participating or complying with the previous steps established in the sales order, as well as those who carry out transactions that are usually incidental and necessary for the participation and compliance. with these steps,” the letter said.
Citgo is under the administration of the country’s opposition after control was wrested from state oil company PDVSA. The company posted record net income of $2.8 billion last year.
Toronto-based Crystallex had been seeking compensation after its gold mine was seized in Venezuela by late President Hugo Chavez. The mining company won an arbitration award in 2016. Oil driller ConocoPhillips is also seeking compensation for its seized assets, along with other creditors.
Venezuela’s communications ministry and representatives of the country’s opposition did not immediately respond to requests for comment.
–With the assistance of Fabiola Zerpa and Nicolle Yapur.
