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Venezuela oil blocked by US courts

International 20 May, 2020 Follow News

Venezuela relies heavily on revenue from Citgo

The United States Supreme Court justices declined on Monday to review a federal court’s ruling that had allowed Canadian miner Crystallex to take over shares of US refiner Citgo in compensation for US$1.4 billion for the expropriation of assets in Venezuela.

US refiner Citgo is the chief revenue earner for Venezuela’s state oil firm PDVSA, but the rejection of the Supreme Court to hear Venezuela’s arguments for appeal of the previous ruling could mean that Venezuela is now even closer to losing control over Citgo than before, according to Bloomberg.

Citgo Petroleum Corp is one of the largest oil refineries in the US. Its current operations are managed by two duelling boards of directors—one appointed by Nicolas Maduro and one appointed by Juan Guaidó—the opposition leader recognised as the legitimate president by the US and 50 other countries – and both are in a power struggle for Venezuela’s US-based refinery that rakes in US$30 billion in revenue.

A US federal appeals court last summer rejected PDVSA’s appeal to knock down an earlier court order that allowed Crystallex to take over Citgo shares in compensation for US$1.4 billion for the expropriation of assets in Venezuela.

Venezuela has long argued that Citgo should be immune from the billions in debt that Venezuela has accrued on the grounds that they are two separate entities, but US courts disagree, ruling that PDVSA and Citgo’s US-based parent company PDV Holding did not show adequate separation from the Venezuelan government, which has accrued billions in debt with multiple parties.

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