A US appeals court Thursday denied Venezuela's request for it to reconsider its ruling allowing a PDVSA creditor to go after US refiner Citgo, its most valuable foreign asset.
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Register NowThe ruling by 13 judges on the US 3rd Circuit Court of Appeals in Philadelphia upholds a decision allowing defunct Canadian miner Crystallex to auction shares in Citgo to collect on a $1.2 billion judgment related to Venezuela nationalizing its gold mine.
The case, along with several others working their way through US courts, could lead to PDVSA losing control of Citgo.
But the Trump administration has showed its interest in blocking that from happening because it would deal a severe blow to the interim administration of Juan Guaido.
In a separate case, the US Treasury Department in October banned any sale or transfer of Citgo shares after PDVSA missed a key payment on 2020 bonds. Treasury said ownership of the shares could not change hands without specific authorization from the Office of Foreign Asset Control until at least January 22.
Treasury encouraged PDVSA and bondholders to keep negotiating a plan to restructure or refinance the debt, saying OFAC would have a "favorable licensing policy toward such an agreement."
VENEZUELAN OIL OUTPUT
US sanctions that were imposed against PDVSA in January blocked US imports of Venezuelan crude and exports of US diluent to Venezuela.
Before the US sanctions, PDVSA depended on Citgo's three refineries for supply of refined products and diluent, and as an export destination for its crude. Citgo owns a 418,000 b/d refinery in Lake Charles, Louisiana; a 157,000 b/d refinery in Corpus Christi, Texas; and a 179,265 b/d refinery in Lemont, Illinois.
Venezuelan oil production rose 50,000 b/d month on month to 650,000 b/d in October, helped by repairs to its Port of Jose Terminal, according to latest S&P Global Platts survey of OPEC production.
S&P Global Platts Analytics expects Venezuelan oil output of about 700,000 b/d in November and December, falling to 600,000 b/d by the end of 2020.
-- Meghan Gordon, meghan.gordon@spglobal.com
-- Edited by Valarie Jackson, newsdesk@spglobal.com