Venezuelan Opposition Tries to Stall CITGO Auction to Avoid Election Backlash

US-backed factions have drawn accusations of collusion and malpractice after their actions significantly raised CITGO's liabilities.
CITGO auction elections
CITGO's refinery in Corpus Christi (Texas) is reportedly generating interest from potential bidders. (CITGO)

Caracas, June 9, 2024 ( – Venezuela’s hardline opposition has lobbied US officials to intervene in an ongoing court-mandated sale of the Caribbean nation’s most important foreign asset, CITGO.

According to Reuters and Bloomberg, opposition members and CITGO’s ad-hoc board have held meetings and reached out to members of Congress and the Biden White House asking Washington to halt or postpone the ongoing auction.

Venezuela’s US-backed opposition is allegedly concerned that the imminent loss of CITGO will lead to a significant loss of votes in the upcoming July 28 presidential election.

In October 2022, Delaware District Judge Leonard P. Stark set in motion the auction of shares belonging to PDV Holding (PDVH), CITGO’s parent company, to satisfy a number of international arbitration awards. The process was originally launched by Canadian miner Crystallex

The actions of the Venezuelan opposition, which has held control of CITGO since 2019 after the Trump administration recognized the self-proclaimed “interim government” led by Juan Guaidó, have come under severe scrutiny for jeopardizing the US-based subsidiary of state oil company PDVSA.

The parallel administration did not show up in court and allowed ConocoPhillips to win a default ruling to enforce a US $8.5 billion award. US courts then allowed ConocoPhillips and several other corporations to attach their claims to the Delaware auction with a so-called “alter ego” judgment that was based on public actions and statements by Guaidó and associates.

As a result, CITGO’s liabilities ballooned significantly past its present $10-13 billion valuation, making its ownership all but certain to change hands should the court-ordered sale proceed. The second round of bidding closes on Tuesday and Stark is scheduled to issue a final decision in mid-July.

The US-backed opposition’s electoral concerns have garnered support in Washington. Elliott Abrams, who served as Special Envoy for Venezuela under the Trump administration, wrote that the auction’s timing is “unbelievably stupid” and “a gift” to Venezuelan President Nicolás Maduro.

“The Biden administration can jump in and notify the court that the timing it adopted before Maduro set the election date for July 28 is now wrong, inappropriate, damaging to U.S. foreign policy,” Abrams argued in a blog post published by the Council on Foreign Relations.

Similarly, a bipartisan group of lawmakers penned a letter to US Treasury Secretary Janet Yellen and Attorney General Merrick Garland urging the administration to “bar the continuation of the sale process through its economic powers.”

The signatories, including Debbie Wasserman Schultz, María Elvira Salazar and Bob Menéndez, called for “immediate action” on this “critical and time-sensitive issue.”

The final sale will require US approval, but the US Treasury’s Office of Foreign Assets Control has pledged a “favorable licensing policy.”

Presidential candidate Antonio Ecarri also wrote a letter to Biden requesting that any final CITGO decision be postponed until the country’s new government takes office in January 2025. The center-right candidate argued that the existing sanctions policy and non-recognition of the Maduro government make it impossible to engage with creditors and restructure debt.

For its part, the Maduro administration has maintained that the imminent loss of CITGO will constitute “the theft of the century” and pledged to bring its case before all available instances.

The present CITGO board, which was appointed by the since-extinct “interim government” and answers to no legitimate Venezuelan authority, has protested that bids have fallen short of the company’s valuation and proposed an alternative payment method.

The auction process will pay creditors on a “first come, first serve basis,” based on when the court approved their writs. Crystallex ($1.0 billion), Tidewater ($80 million), ConocoPhillips ($1.3 billion) and O-I Glass ($700 million) stand at the top of the list. 

ConocoPhillips has recently moved to have its $1.3 billion award by the International Chamber of Commerce recognized in Trinidad and Tobago. The oil giant might attempt to seize natural gas proceeds owed to Venezuela from joint projects as compensation. 

ConocoPhillips likewise has a second $8.5 billion award at the CITGO auction that has since surpassed $10 billion with accrued interest. The company was rumored to be considering using its claims instead of cash in a potential bid for CITGO.

With the bidding deadline approaching, corporate actors are reportedly raising their interest in CITGO’s refinery in Corpus Christi, Texas. According to a Reuters source, some consortia have expressed interest in submitting bids with the ultimate goal of only keeping the Corpus Christi facilities.

The 167,000 barrel-per-day (bpd) capacity refinery is reportedly seen as having potential to grow. The nearby location of shale fields and pipelines is also a significant advantage. Koch Industries-owned Flint Hills, which owns a refinery bordering CITGO’s, is allegedly considering submitting a bid or joining a consortium.

Apart from Corpus Christi, PDVSA’s US subsidiary owns refineries in Lemont (Illinois) and Lake Charles (Louisiana). The three installations have a combined processing capacity of 769,000 bpd. CITGO additionally owns a network of more than 4,000 gas stations, mostly located on the US east coast.