The Venezuelan opposition is holding its breath. Even if it wins against the outgoing president, Nicolas Maduro, it could well lose, in September, control of a strategic resource for the reconstruction of Venezuela: the oil company Citgo. Venezuela’s creditors are indeed seeking to be reimbursed by recovering, through legal means, the assets of this American subsidiary of Petroleos de Venezuela, valued at between 11 and 13 billion dollars.
Authorized by the American justice system in January, the forced sale of this company was postponed until September so as not to interfere in the Venezuelan elections. But the case, which is very political, remains as explosive as ever.
Because the loss of this asset would make it more difficult to implement the economic recovery program supported by the opposition. A hard blow for its candidate, Edmundo Gonzalez, who is well ahead in the polls. And a godsend for the outgoing president, Nicolas Maduro, who could take advantage of it to discredit the opposition, while fueling his anti-American diatribe.
Citgo is one of Venezuela’s most important assets abroad. Based in Houston, Texas, Citgo ranks seventh among the largest oil companies in the United States. Since 2019, due to US sanctions against the Maduro regime, it has been controlled by the opposition in exile.
The ideal target
About twenty companies, victims of expropriations ordered by the former Bolivarian leader Hugo Chavez, are demanding $21.3 billion from the company. It was a Canadian company, Crystallex, which initiated this movement after being dispossessed of a gold mine in 2011 in Venezuela.
In theory, a public company does not have to be jointly and severally liable for the debts of its government. But in 2017, a US federal judge, Leonard Stark, ruled in favor of Crystallex, considering that the company’s proximity to power made it an “alter ego” of the regime. The list of creditors grew, making the company insolvent, so much so that Judge Stark authorized the sale of part of Citgo’s shares.
A political weapon
At the request of the opposition in exile, the US Treasury suspended the application of the judicial decision for several years. But in January, the White House decided to lift its veto, considering that the Venezuelan leader was doing everything to hinder the freedom of the presidential election in July.
In response, Maduro’s government denounced a “vulgar plunder,” saying that “this decision constitutes a further step in the multifaceted aggression carried out by US institutions against Venezuela.” After an initial unsuccessful tender, the Delaware court held a new auction in June.
But with elections approaching, the forced sale of the oil company, far from putting pressure on the outgoing president, could well work in his favor. “The only one who could benefit politically from the sale of Citgo is Maduro, because he would take advantage of it to shift the blame to the opposition,” says Vladimiro Mujica, a physics researcher and active member of the Venezuelan opposition. According to him, the sale of Citgo would not be enough to compensate creditors, but would deprive Venezuela of a source of revenue essential to the economic reconstruction of the country in the event of a victory of the opposition.
At the very beginning of July, the Delaware court finally agreed to postpone the hearing to present the winning bid until September 19. A final reprieve granted to Citgo by the American justice system.