Venezuela hangs on to Citgo after big debt payment

Venezuela managed to retain ownership of Citgo, the big U.S. refining and gasoline marketing company that is one of its few remaining sources of hard currency, according to a report.

In August, Canadian mining company Crystallex International got a court order authorizing the sale of Citgo’s U.S. parent to satisfy a $1.2 billion debt of the cash-strapped country, Reuters said Sunday.

But late last week a Canadian court approved a settlement between Petroleos de Venezuela (Pdvsa) and Crystallex, one of Pdvsa’s creditors, that entails the Venezuelan company paying Crystallex.

Among terms of the settlement is a $425 million payment by Pdvsa to Crystallex, which has been completed. The rest of the amount due, which has grown to $1.4 billion since the August order, will be paid in installments by 2021. However, if Pdvsa doesn’t post collateral by Jan. 10, Crystallex may restart legal action against the Venezuelan company.

The clash between Venezuela and Crystallex arose from the socialist government’s expropriation five years ago of the Canadian company’s gold mining project in the South American country.

The government’s failure to compensate Crystallex for the asset opened the way for legal action.

Houston-based Citgo owns three large U.S. refineries, which have the capacity to refine as much as 749,000 barrels of crude oil per day, and much of the crude oil they refine comes from Venezuela.

Citgo also owns 48 terminals, nine pipelines and three lubricants blending and packaging plants and employees approximately 3,400 employees.

In addition, Citgo supplies a network of approximately 5,200 locally owned and operated branded retail outlets in 30 states and the District of Columbia.