Venezuela: Delaware Court Extends CITGO Bidding Deadline as New Suitors Emerge

Caracas, June 2, 2025 (venezuelanalysis.com) – US District Judge Leonard Stark has extended the bidding period for Venezuelan US-based refiner CITGO until June 18.

The Delaware court announced its decision following a recommendation from “Special Master” Robert Pincus, who is charged with overseeing the auction of CITGO. Pincus argued for postponing the original May 27 deadline to promote a “more robust bidding process.”

Following the submission of bids, the special master is due to present a winning offer recommendation to the court by June 27, with a final hearing to conclude the sale scheduled for July 22.

In 2022, Judge Stark set in motion a court-mandated sale of shares belonging to CITGO’s parent company, PDV Holding (PDVH), to satisfy creditor claims against Venezuela. The debt mostly stemmed from international arbitration awards granting compensation to corporations that had assets nationalized by the Venezuelan state in the 2000s.

ConocoPhillips and other corporations did not accept Venezuela’s reformed oil legislation under former President Hugo Chávez that granted increased state control over the oil industry. The foreign firms rejected Venezuela’s compensation offers and pursued international arbitration.

The court originally accepted 18 claims totaling US $21.3 billion. Firms are set to be compensated on a “first come, first served” basis, with Crystallex ($1.0 billion), Tidewater ($80 million), ConocoPhillips ($1.3 billion) and O-I Glass ($700 million) first on the list. According to reports, subsidiaries of investment group Pharo withdrew their claims to bring down the total liabilities to $20.6 billion.

In April, Stark approved a $3.7 billion “stalking horse” offer from Red Tree Investments to set a minimum price in the auction.

Gold Reserve had submitted a $7.1 billion rival offer and is reportedly submitting a “topping” bid. Both Gold Reserve and Red Tree are on the list of CITGO creditors, meaning they can include their claim in the bid. Other interested parties include trading group Vitol and investment fund TPG Angelo Gordon.

Elliott Management has reportedly withdrawn from the bidding process. The vulture fund had a $7.3 billion offer accepted in September 2024, though controversy over sale terms led Stark to reverse course and relaunch the auction.

The court’s approval of Red Tree’s stalking horse bid drew criticism over its low value, which falls significantly short of CITGO’s total liabilities as well as its present $11-13 billion valuation. However, the offer cleared a hurdle for the company’s sale by reaching a settlement with PDVSA 2020 bondholders, offering debt at CITGO and convertible notes as compensation for the roughly $2 billion owed.

The defaulted PDVSA 2020 bond included half of CITGO’s shares as collateral. Successive US Treasury protections barred bondholders from executing the collateral.

Apart from the PDVSA 2020 issue, the Delaware auction is likewise threatened by creditors “jumping the line” and seeking compensation for their claims via parallel litigation. However, last week a New York court dismissed an “alter ego” lawsuit from G&A Strategic Investments to collect $1.1 billion in debt from defaulted notes.

Special Master Pincus claimed that the parallel lawsuit setback would encourage more participation in the Delaware court-mandated auction.

Pro-opposition Florida congresswoman intervenes

Venezuela’s CITGO was seized by the first Trump administration in 2019 and placed under the control of the “self-proclaimed” interim government headed by Juan Guaidó. Though the parallel administration dissolved in 2023, the company remains under an ad hoc board overseen by a defunct opposition-majority Venezuelan parliament.

Guaidó and his associates drew accusations of malfeasance and conflicts of interest over a series of decisions that ballooned CITGO’s debts.

On Thursday, Florida Congresswoman María Elvira Salazar wrote a letter urging the Trump administration to block the “forced sale” of the Venezuelan refiner so it can remain in the hands of the US-backed opposition. Salazar has pushed for a hardline approach against the Nicolás Maduro government that has included the tightening of sanctions targeting the oil industry.

Salazar, together with Representatives Carlos Gimenez and Mario Díaz-Balart pushed to cancel an extension to Chevron’s license to operate in Venezuela in exchange for their votes on Trump’s spending bill.

CITGO’s final sale is subject to Washington’s approval, though the US Treasury has promised a “favorable licensing policy.”

For its part, the Maduro government has decried the court-ordered sale of the Caribbean country’s most important foreign asset as “the theft of the century” and vowed to challenge the loss of the refiner.

A subsidiary of Venezuela’s state oil company PDVSA, CITGO owns refineries in Illinois, Louisiana and Texas with a combined processing capacity of 769,000 barrels per day (bpd). The firm’s portfolio also includes a pipeline network and over 4,000 service stations, mostly on the US East Coast.

Edited by José Luis Granados Ceja in Mexico City, Mexico.