The US Treasury Department’s Office of Foreign Assets Control (OFAC) on Wednesday extended a license that protects Venezuela-owned CITGO Petroleum from creditors trying recoup debts, Reuters reports.
The OFAC extended the Houston-based oil refiner’s general license until 20 July, preventing bondholders and other creditors from seizing billions of dollars in debt claims against Venezuela.
The move is a continuation of a previous three-month extension granted in January, which ran out on 20 April. At the time, bondholders tried to seize Citgo assets worth approximately $900m to recoup pending debt. This followed the original OFAC license, valid for 12 months.
Each extension has halted court cases brought by US courts and international tribunals. Since 2021, Citgo’s management has engaged in direct negotiations with bondholders and creditors in an attempt to find repayment solutions and halt pending court cases, according to Reuters.
The latest extension comes as a US district court judge seeks federal approval to schedule an auction that could potentially break up Citgo, which currently stands as the seventh-largest US refiner by volume.
Citgo split from Venezuelan state-run oil company PDVAS in 2019, under an order by Venezuela’s National Assembly, after the US imposed sanctions in an attempt to force the displacement of President Nicolas Maduro following disputed elections.
A US court this month asked the OFAC for guidance on auctioning shares in PDVAS, still Citgo’s majority-owned parent company, to cover a $970m judgement from mining company Crystallex International over the seizure of its mining assets in Venezuela. An OFAC response is expected at the end of the month.
O-I Glass, Huntington Ingalls Industries, ACL1 Investments, Rusoro Mining Ltd, and Gold Reserve have separately won attachments contingent on obtaining US Treasury approval to seize assets, or an end the Treasury protection. Their judgments concern assets totalling $2.6 billion.
Oil and gas giant ConocoPhillips also has a claim against the state of Venezuela valued at $1.29bn, over the nationalisation of the company’s oil assents in the country.