As Venezuela and its state-owned oil firm PDVSA lurch from crisis to crisis, defaulted creditors are jockeying for position to ensure they are among the first to receive cash when payday eventually comes. The Opec country is essentially bankrupt and creditors are increasingly chasing its oil assets with their biggest target being Citgo, the Houston-based oil refiner that processes Venezuelan crude oil and is estimated to be worth roughly $4bn. Next in their sights is seizing Venezuelan oil cargoes at sea, as US hedge fund Elliott Management did with an Argentine ship in 2012 after it won a US court ruling to collect on unpaid debts. Venezuela is reportedly transferring oil cargoes in safe harbours including Cuba to avoid such risks.
The shift in creditor strategy is a show of force by the private sector against the regime of President Nicolás Maduro, which is overdue on $5.7bn of debt payments. Although Mr Maduro survived an assassination attempt this month, is wrestling with an economy wracked by hyperinflation, and faces a series of government sanctions by the US, Europe, Canada and Latin America’s biggest countries, he also appears to have sealed his political control over the country. Venezuela is reportedly transferring oil cargoes in safe harbours including Cuba to avoid seizure © Reuters The latest win for creditors came last week, however, when Canadian mining company Crystallex won a key battle in its attempts to force Venezuela to pay $1.4bn in compensation for expropriation of a mining project.