Venezuela's Opposition Boards Set to Cede Control of Citgo
Venezuela's opposition-led boards are preparing to end their supervision of Citgo Petroleum following the interim government's recognition by Washington.
The opposition-controlled boards that have overseen US-based refiner Citgo Petroleum for the past seven years are preparing to step down as early as this month. This follows a shake-up by Venezuela's interim President, Delcy Rodriguez, according to two sources involved in the preparations.
Rodriguez began efforts earlier this year to retake control of the Venezuela-owned refiner after her government was formally recognized by Washington. This recognition came after the capture of Nicolas Maduro by US forces in January. Since then, the interim administration has replaced law firms that had represented Venezuela and state-run oil company PDVSA in international lawsuits and arbitration cases, as per US court filings.
"The boards are no longer recognized as valid by all political and legal counterparties, so they can no longer continue," one source said, adding that the transition is happening "without any previous discussion."
Citgo severed ties with its parent company, PDVSA, in 2019 following US sanctions on Venezuela's energy sector. This was done under orders from a National Assembly that the opposition then controlled. Even after losing control of the assembly, the opposition-led boards continued to supervise the refiner and were involved in appointing its board of directors.
The transition comes amid a looming US court-organized auction for Citgo's holding company. A judge has approved a bid from an affiliate of hedge fund Elliott Investment Management to pay creditors. The sale awaits final approval from the US Treasury Department, which has protected Citgo from creditors. Treasury extended this protection until September 17. A US court of appeals has set an October hearing on challenges to the auction process.
Rodriguez's administration has called the court-ordered sale "theft" of a sovereign asset. However, no imminent changes are expected to Citgo's board of directors or its executive team, led by CEO Carlos Jorda. Under opposition oversight, Citgo has remained profitable, recently regaining access to Venezuelan crude and reporting a net income of $936 million in the second quarter, up from $100 million in the same period last year.