Venezuela’s Citgo, Which Refines 5% Of US Gasoline, Is Weighing Bankruptcy
In the latest salvo to emerge from the escalating fight between the Trump administration and Venezuela’s ruling Maduro regime over control of the South American country’s state-owned energy assets, the WSJ reports that in order to protect its operations, Venezuela’s Citgo Petroleum is considering various options, including filing for bankruptcy.
Citgo, which is among the largest refiners in the U.S., is weighing its options while the White House attempts to shift control of Venezuela’s assets from President Nicolás Maduro to opposition leader Juan Guaidó, whom the U.S. has recognized as the legitimate head of state prompting accusations by the Maduro regime that the US is fomenting a presidential coup.
In addition to control over the military, control of Venezuela’s state-owned assets is seen as key to the country’s political fate, and the tussle is forcing Citgo to consider U.S. bankruptcy proceedings as one of several plans drafted by some executives and advisers, the WSJ reports citing people familiar.
Reached for comment, a Citgo spokesman said Thursday the company is “profitable, solvent and has contingency plans to successfully manage the recent events.” Meanwhile, the US responded that the US goal is for Citgo to remain viable, but not under Maduro control.
While Citgo’s financial pressures aren’t pressing as of this moment, a bankruptcy filing could stabilize operations while providing an organized forum for restructuring its debt, dealing with a looming governance crisis and sorting out competing creditor claims on the company’s assets, with the WSJ reporting that Citgo, which is owned by defaulted state oil giant Petróleos de Venezuela SA, or PdVSA which was hit by US sanctions this week in an attempt to cripple the Maduro regime, has retained law firm Willkie Farr & Gallagher LLP for legal advice on several contingency plans.
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