Venezuela Issues Arrest Warrants for ‘Illegal’ Oil Executives

Oil subsidiary CITGO has been the subject of several legal battles.

By Manuela Solé
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PDVSA’s subsidiary CITGO remains mired in legal disputes in US courts. (Wikimedia Commons)
PDVSA’s subsidiary CITGO remains mired in legal disputes in US courts. (Wikimedia Commons)

Mérida, January 20, 2021 (venezuelanalysis.com) – Venezuelan Attorney General Tarek William Saab issued arrest warrants for two opposition-appointed directors of PDVSA’s US-based subsidiary CITGO.

Jose Pocaterra and Andres Yrigoyen were charged with conspiracy, infringement of public functions, money laundering, criminal association and obstruction of justice after being chosen by the former National Assembly to join the CITGO board.

“We won’t allow an alleged parallel authority to undermine the country’s interest and assets,” the chief prosecutor stated in a press conference on Monday.

The warrant also entails the seizure of any assets Pocaterra and Yrigoyen might hold in the country and their bank accounts frozen. According to LinkedIn profiles, the former is based in Madrid and the latter in Houston, Texas.

Despite a new National Assembly taking office after legislative elections, opposition leader Juan Guaido and loyalists decided to extend the outgoing parliament’s term with support from the US and allies.

Saab denounced that the opposition’s parallel parliament lacks the authority to appoint CITGO executives, following January 7’s designation of Yrigoyen as president of CITGO’s board of directors and Pocaterra as member of the board.

Self-proclaimed “Interim President” Juan Guaido took control of CITGO in 2019 after being recognized by the US government as Venezuela’s lawful leader.

The arrest warrants come as the oil subsidiary remains mired in legal disputes in US courts. Last Friday, a Delaware judge authorized the sale of CITGO shares to pay Canadian gold miner Crystallex a US $1.4 billion arbitration award for the expropriation of its assets by the Venezuelan government in 2008.

In response, Venezuela’s Foreign Minister Jorge Arreaza blasted the decision as “a procedural fraud” with the goal of “stealing Venezuela’s main asset abroad.”

Attorney General Saab also weighed in on the Crystallex ruling, arguing that Guaido’s control of CITGO harmed the country’s defense in US courts. He also pointed out the conflict of interest surrounding opposition-appointed “solicitor” Jose Ignacio Hernandez, who had previously worked as an advisor for the mining giant.

The Canadian company had launched legal proceedings to collect on the World Bank’s international arbitration tribunal awarded compensation, with a US court ruling that the company could seize CITGO assets in October 2019.

PDVSA’s subsidiary is likewise imperiled by US oil company ConocoPhillips, which is looking to collect on a similar $1.4 billion arbitration award following the nationalization of its assets in 2007. Additionally, CITGO’s shares were pledged as collateral for PDVSA’s 2020 bond, with bondholders entitled to seize them after payment was defaulted.

However, the multinational corporations’ seizure is not straightforward after the US Treasury Department issued an amendment to its Venezuela sanctions on Venezuela which blocks claimants from collecting payments unless authorized by a specific license. Similarly, transactions with the 2020 bond have been forbidden until July 2021, while attempts from the Venezuelan government to renegotiate debt have been unsuccessful.

The US-based PDVSA subsidiary was also recently in the sights of the Venezuelan justice system when a court sentenced six former CITGO executives for corruption in November.

At the time of their arrest, Saab stated that the accused had signed refinancing contracts with draconian conditions while pledging the company as collateral.

Edited and with additional reporting by Ricardo Vaz from Mérida.