Ad Hoc Administrative Board of PDVSA Reaffirms Commitment to Safeguard Citgo

(Piero Stewart, Energy Analytics Institute, 30.Dec.2024) — The Ad Hoc Administrative Board of PDVSA reiterated its commitment to the defense of Venezuela’s assets abroad, especially PDVSA’s 807,000 barrel per day (b/d) US refining affiliate Citgo Petroleum Corporation.

Horario Medina, the president of Ad Hoc Administrative Board of PDVSA, said 27 Dec. 2024 in a video on the social media platform X, formerly Twitter, that the game plan had not changed as the goal was to continue to defend Citgo so that it would remain owned by Venezuelans.

Houston-based Citgo continues to generate positive financial results and thus remains a fundamental and high-value asset for PDVSA, the Ad Hoc Administrative Board of PDVSA announced 30 Dec. 2024 in an official statement. As such, Citgo continues to be a strategic asset owned by PDVSA, the entity said.

The Ad Hoc Administration Board of PDVSA “will continue to use all available legal resources in its commitment to justice, transparency and compliance with the laws, acting for the benefit of the company’s interests,” it said in the statement.

Citgo owns and operates 3 highly sophisticated US-based crude refineries. These include Lake Charles, La. (463,000 b/d), Lemont, Ill., (177,000 b/d) and Corpus Christi, Texas (167,000 b/d).

Additionally, Citgo wholly and/or jointly owns 42 active terminals — one of the largest networks in the US — 8 pipelines and 3 lubricants blending and packaging plants.

Collectively, these refining assets once allowed PDVSA direct access to the US market.

However, since 2018, a US Delaware District Court has imposed an embargo on PDVSA’s shares in PDV Holding (PDVH), the indirect owner of Citgo.

Later in 2019, US sanctions imposed by the first US presidential administration of Donald Trump, as part of a “maximum pressure” campaign to upseat Venezuela’s president Nicolás Maduro, effectively led to the end of the long-running and successful Citgo-PDVSA relationship. That, as the US agreed to safeguard Citgo from numerous creditors and more importantly Maduro’s regime until a so-called US friendly regime returned to Venezuela.

The Citgo situation has developed into a complex judicial process under the supervision of US Federal Judge Leonard Stark. This process continues to be active at the stage of a forced sale of shares, which is framed in multiple procedural and commercial issues still to be resolved, including objections and the possibility of appeals by Venezuelan entities.

In 2024, PDVSA and Venezuela continued to face lawsuits exceeding $20bn, derived mainly from wrongful asset expropriations and debts contracted by the Venezuelan regimes of Hugo Chávez Frias (1999-2013) and Nicolás Maduro (2013-to date).

“Given the complexity of the judicial circumstances, the Ad Hoc Administrative Board of PDVSA maintains its willingness to cooperate with alternative mechanisms that may be proposed by the parties involved in the process to comply with financial obligations and avoid a forced sale, once a democratic transition is achieved in Venezuela,” the Ad Hoc Administrative Board of PDVSA said in the statement.

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