Venezuela Denounces ‘Theft of the Century’ as US Endorses Citgo Sale

Caracas warned that the OFAC license violates Venezuelan and international law and that no country’s assets are safe on US territory.


Caracas, May 4, 2023 ( – The US government will not block the sale of CITGO, the US-based subsidiary of Venezuelan state oil company PDVSA and the country’s most important asset abroad.

In a letter filed on Friday in the US District Court in Delaware, the US Department of Justice said that the Treasury’s Office of Foreign Assets Control (OFAC) “will not take enforcement action against individuals or entities” involved in a court-ordered auction process of CITGO shares set in motion last year.

The statement added that once a winning bidder emerges, OFAC will implement a “favorable licensing policy” for the execution of CITGO’s sale procedure “or the negotiation of a settlement agreement among the relevant parties.”

The April 7 Justice Department letter was released following the issuing on Friday of OFAC General License 42, which authorizes transactions conducted by the defunct opposition-controlled 2015-2020 Venezuelan National Assembly (AN) for “the negotiation of settlement agreements” involving any debt of the Venezuelan government, PDVSA, or any entity where PDVSA owns 50 percent in shares or more.

According to Robert B. Pincus, the Delaware court-appointed “Special Master” tasked with securing the US government greenlight for CITGO’s sale, the auction process could begin in September with the highest bid reviewed in June 2024. Earlier this year, Pincus met with Justice and Treasury officials and asked OFAC for guidance on the auction of shares from CITGO’s parent company, PDV Holding.

Pincus likewise urged the court to move quickly “to take advantage of CITGO’s recent financial and operational performance and the current state of the refining industry,” according Reuters. Creditors and analysts have suggested the possibility of off-court settlements as well.

With three refineries and a network of over four thousand gas stations stateside, the Houston-based oil subsidiary reportedly registered a $2.8 billion profit last year and could be valued at $13 billion. However, no revenue has been perceived by Caracas since 2019 after Washington recognized Juan Guaidó’s self-proclamation as “Interim President” and handed CITGO’s management to an opposition ad hoc board.

As a result of its seizure, the company was left vulnerable to a number of threats as several foreign corporations and bondholders looked to claim shares as compensation for arbitration awards and the defaulted PDVSA 2020 bond for which 50.1 percent of CITGO shares were pledged as collateral.

In 2020, the US Treasury Department stepped in and began issuing six month or year-long licenses to block any attempt to seize the company. The latest was general license 5K released on April 19 for only a three-month period.

The current auction process was brought forward to the Delaware court by Canadian miner company Crystallex in order to collect $970 million of outstanding debt from a $1.4 billion international arbitration award granted by the World Bank’s International Center for Settlement of Investment Disputes (ICSID) in 2016 in compensation for the 2008 nationalization of Las Cristinas gold mine in eastern Venezuela.

Other creditors looking to collect awards via CITGO shares are glass firm Owens-Illinois, Huntington Ingalls Industries, ACL1 Investments, and Rusoro Mining owed a combined $1.6 billion plus accrued interest as well as Koch Minerals and Koch Nitrogen ($387 million) and ConocoPhillips ($1.3 billion). They have received conditional approvals to tag their claims potential CITGO auction. Additionally, in August 2022 ConocoPhillips won a default ruling to enforce a separate $8.5 billion ICSID compensation for three oil projects nationalized by Chávez in 2007.

On Wednesday, Venezuelan Vice President Delcy Rodríguez accused Washington of committing “the theft of the century” by authorizing the subsidiary’s auction process in order to benefit Western economic interests represented by corporations.

“This is organized crime in the most sophisticated way, directed by the Government of the United States,” she said during a televised press conference alongside Foreign Minister Yván Gil and Oil Minister Pedro Tellechea.

Rodríguez added that the OFAC general license “violates not only Venezuelan laws but all international law,” and warned that no country can be assured that its assets on US territory will be safe “if a plot to seize and sell them can be set up overnight.”

The Vice President likewise stated that the Maduro government would not recognize “any type of deal” with foreign creditors unless done directly with the Venezuelan state. She recalled that the 2015 opposition-controlled National Assembly recognized by OFAC as the Venezuelan negotiator “no longer exists.” The parliamentary elections in December 2020 saw the legislative body renewed with a Chavista majority.

The Venezuelan official said that the members of the defunct parliament who are responsible for the loss of CITGO will face asset seizures under the newly-approved “Domain Extinction” law. Rodríguez also singled out José Ignacio Hernández, who served as Guaidó’s “special prosecutor”, for his role in CITGO’s looming breakup.

“Crystallex had Hernández as one of their experts. Later he called himself Venezuela’s prosecutor not to defend our patrimony but the interests of the company he had already represented,” Rodríguez explained.

Guaidó, who was ousted as “interim president” earlier this year, and his associates have been accused of compromising assets such as CITGO by not showing up in court, having conflicts of interest, and striking under-the-table deals with corporations. He recently fled to the United States.

For its part, the Foreign Ministry issued a communique stating that CITGO’s theft “represents a blow” to the dialogue process in Mexico and to the international conference held in Bogotá “where almost unanimously the participating countries demanded the US government lift the criminal sanctions against Venezuela.”

Finally, National Assembly deputy and Chavista leader Diosdado Cabello accused Guaidó of being behind this last blow against CITGO. “A week before [the OFAC license approving the sale] one of the greatest traitors that this homeland has ever seen fled to the United States. That is no coincidence.”

Edited by Ricardo Vaz from Caracas.