Citgo's Future: The Fight Over Venezuela’s Largest Overseas Asset

The U.S. Treasury has extended a license protecting Citgo Petroleum from creditors until March 20. A Delaware judge ordered its sale, linked to compensating Venezuelan creditors. The Treasury's Office of Foreign Assets Control must approve the sale, while Citgo, under U.S. sanctions since 2019, gained temporary access to Venezuelan crude.

The United States Treasury Department has extended a license that safeguards Venezuela-owned Citgo Petroleum from creditors through March 20, as per a notice published by the department on Monday.

Hedge fund Elliott Investment Management is poised to take over Citgo, based in Houston, following a Delaware judge's decision late last year for a court-ordered auction of its parent company, PDV Holding. This move aims to settle billions of dollars in debts to Venezuelan-linked creditors. For the sale to proceed, it requires approval from the Treasury's Office of Foreign Assets Control (OFAC) and the lifting of the protection license.

OFAC has yet to issue a ruling amidst broader U.S. policy moves under President Donald Trump's administration seeking control over Venezuela's energy sector. This follows the detention of President Nicolas Maduro and support for a government led by interim leader Delcy Rodriguez. Citgo, severed from its parent PDVSA due to U.S. sanctions in 2019, now operates its refining network through boards appointed by Venezuela's political opposition. Recently, Citgo was granted temporary access to Venezuelan crude for the first time in seven years, facilitated by trading houses Vitol and Trafigura under U.S. licenses.