US court approves sale of Venezuela’s CITGO

A US judge has approved tthe sale of Venezuela’s US-based refiner CITGO, allowing Canadian mining company Crystallex to collect $1.4 billion it lost in the takeover of the refiner by the late President Hugo Chávez a decade ago.

Chávez took over the gold mining firm’s Venezuela concession and the local operations of other international companies as part of his Bolivarian revolution. 

Crystallex, which went bankrupt, sued Venezuela to recover its lost investment in Venezuela, and in that lawsuit the court allowed Crystallex to attach assets of CITGO’s parent company, Venezuela’s state oil firm PDVSA, ruling that Venezuela had erased the lines between the government and its oil firm.

Houston-based CITGO, which is valued at around $8 billion, has been part of PDVSA since the 1980s and it operates three refineries in the US, in Louisiana, Texas and Illinois, in addition to a network of pipelines across the US. The company supplies between 5-10 per cent of US petrol.

With President Donald Trump’s administration having recognised Venezuela’s opposition leader Juan Guaidó (pictured) as Venezuela’s legitimate leader, US courts granted approval to a board appointed by the opposition to take control of CITGO. 

The latest ruling is critical to Guaidó, who was hoping CITGO’s profits could be channelled towards financing the country’s recovery in the event that Guaidó comes to power.

In a statement, Guaidó said, “the legitimate government will continue fighting to protect our country’s assets.” 

The order by Chief Judge Leonard P. Stark of US District Court in Delaware follows an earlier decision by the US Supreme Court that upheld a ruling by Stark that authorised CITGO’s liquidation.

Obstacles still remain before moving ahead with CITGO’s sale, however. Canadian mining company Crystallex must first get a license from US Treasury officials, which had temporarily shielded Venezuela’s opposition from losing CITGO.