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Treasury Department Extends Protection for Citgo From Petroleos de Venezuela Creditors

The move effectively bars creditors for the next seven months from liquidating Citgo refineries as payment for the debt.

Image source: Citgo

WASHINGTON (Reuters) -The U.S. Treasury Department on Wednesday extended a measure barring transactions related to Venezuelan state oil company Petroleos de Venezuela’s (PDVSA) 2020 bond until July 2021, amid heavy U.S. sanctions on the South American country.

The move effectively bars PDVSA creditors from seizing shares in the parent company of U.S. refiner Citgo Petroleum Corp, a PDVSA subsidiary, which were used as collateral for the bond – for the next seven months.

A previous measure was set to expire on Jan. 19, the day before U.S. President-elect Joe Biden is set to be sworn in.

President Donald Trump’s administration in early 2019 sanctioned PDVSA, the lifeblood of Venezuela’s economy, as part of its effort to oust President Nicolas Maduro, who dozens of Western nations accuse of corruption, human rights violations, and rigging his 2018 re-election.

Those sanctions, together with Washington’s recognition of opposition leader Juan Guaido as Venezuela’s legitimate president, paved the way for the opposition to take control of Citgo, the eighth-largest U.S. refiner with a capacity of some 769,000 barrels per day.

Citgo declined to comment on the extension of protection against creditors.

U.S. officials have argued that allowing creditors to control the company would represent a setback for Guaido and U.S. policy.

Maduro has accused the opposition of “stealing” Citgo, and argues that Washington is seeking to oust him in a coup in order to control the OPEC nation’s vast oil reserves.

Reporting by Susan Heavey in Washington, Luc Cohen in New York and Gary McWilliams in Houston; editing by Richard Pullin.


Source: Reuters

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