UPDATE 1-US court accepts $20.8 billion in claims against Venezuela in Citgo auction

A final decision on the winner is still months away with awards requiring approval by the U.S. Treasury, which has protected Houston-based Citgo from Venezuela creditors since 2019. A board supervising the refiner has been in payment negotiations with U.S. oil producer ConocoPhillips, Canadian miner Crystallex Corp and organized bondholders - for over a year, but no claims have been settled.

A U.S. court on Friday approved claims by 17 Venezuela creditors, including ConocoPhillips, Rusoro Mining and Koch Industries, to get proceeds from a coming auction of shares in the parent of Venezuela-owned oil refiner Citgo Petroleum, to satisfy claims for expropriations and debt defaults. The list, which reduced the scope of the claims to $20.8 billion from the $24 billion sought by creditors, comes after a court officer excluded arbitration awards and court rulings that had failed to satisfy the court's requirements.

Creditors have flocked to a U.S. court in Delaware to press claims that are almost double Citgo's $11 billion to $13 billion value. The Houston-based refiner operates an 807,000-barrel-per-day refining network, 38 terminals, six pipelines and supplies 4,200 independent retailers. First bids for the shares are due on Monday with a second bidding round to come later this year. A final decision on the winner is still months away with awards requiring approval by the U.S. Treasury, which has protected Houston-based Citgo from Venezuela creditors since 2019.

A board supervising the refiner has been in payment negotiations with U.S. oil producer ConocoPhillips, Canadian miner Crystallex Corp and organized bondholders - for over a year, but no claims have been settled. Citgo declined to comment on the court decision.

Friday's decision gives priority in payments to Canadian miner Crystallex, which brought the case, Tidewater, Conoco, O-I Glass, and Huntington Ingalls , the filing shows. Citgo has been valued in the past at between $11 billion and $13 billion. The auction, which could lead to one of the largest court sales in U.S. history, was launched in October by U.S. Judge Leonard Stark after he received a green light from the U.S. Treasury Department, which has so far protected Citgo from creditors.

Crystallex first introduced its $990-million claim against Venezuela in 2017, but U.S. sanctions on Venezuela prevented it from collecting.