The US government has given Venezuelan-owned, Texas-based oil refiner Citgo another three-month lifeline, protecting it from creditors who are trying to seize it in compensation for missed debt repayments. In a statement issued late on Friday, the Treasury also said it was giving Chevron and four oil service providers another three months to continue working in the crisis-wracked Opec nation. Both agreements run until April 22.
Citgo lies at the heart of a long dispute involving US bondholders, Venezuela’s state-owned oil company PDVSA, the government of Nicolas Maduro and the rival administration led by opposition leader Juan Guaido. In 2016 PDVSA issued bonds, due to mature this year, using Citgo as collateral. Late last year it defaulted on the debt, prompting creditors to seek compensation. But the US government says Citgo, which operates three refineries in the US, now belongs to the Guaid6 administration and, in a bid to preserve it for a future in which Mr Maduro is nolonger in power, it has taken steps to stop creditors getting their hands on it.
Earlier this month Washington reaffirmed its commitment to Mr Guaid6 as the country’s legitimate interim president, despite his failure to remove Mr Maduro from power. “This [the Treasury’s three-month extension] is in line with the US government continuing support with Guaid6 and the interim government,” said Cecely Hugh, investment counsel at Aberdeen Standard Investments. “The negotiations for a settlement with the PDVSA 2020 bondholders are continuing and it would not make sense to derail these talks by lifting the ban on enforcement of the security.”