Special Prosecutor's Office seeks to demonstrate Citgo's new independence to save it from embargo

Since 2018, there is a threat that Citgo Petroleum Corp., PDVSA's most important asset abroad, will be liquidated in compensation to Crystallex.

Proving that Citgo Petroleum Corp. has once again become an independent company from the Venezuelan State, and that it should not be liquidated to settle a public debt, is the mission that the Office of the Special Prosecutor of the Republic has undertaken as a last resort to safeguard the oil company .

Representatives of the interim government of Juan Guiadó offered a balance on Friday, July 17, about the litigation against Citgo, the US subsidiary of PDVSA that is at risk of being seized by the Canadian company Crystallex.

Present at the virtual press conference were Carlos Vecchio , Ambassador of the Guaidó administration to the United States; Elías Mata, President of the Energy and Petroleum Commission of the National Assembly, Dr. Enrique Sánchez Falcón , Special Prosecutor of the nation and Pedro Jedlicka, director of litigation of the Special Prosecutor's Office, all involved in the defense of the case and the denials international.

The shadow of the threat

And it is that since 2018 there is a threat that Citgo Petroleum Corp. , PDVSA's most important asset abroad, will be liquidated in compensation to Crystallex for the debts acquired by the governments of former President Hugo Chávez and the current president, Nicolás Maduro.

In 2018, Judge Leonard P. Stark of the United States District Court in Wilmington authorized Crystallex to take control of Citgo because this company belongs to PDVSA and, in turn, PDVSA was irregularly administered by the madurismo.

However, this Friday, July 17, the final hearing of this litigation began, but with one particularity: in it, the legal team of the Venezuelan Special Prosecutor's Office seeks to demonstrate the restoration of independence between the Republic, with whom the debt was established , and the Citgo administration.

And it is that, after the installation of the interim government of Juan Guaidó, a Citgo administrative board was appointed that has maintained the independence of the company with respect to the administration of PDVSA and the State.

Thus, it is this new condition, used as a key argument for Citgo's defense, that did not exist when Crystallex made the demand: that is why it was justified that the liquidation of this asset paid for the broken dishes.

Citgo is emerging as "the most important asset for the next recovery in Venezuela"

Ambassador Carlos Vecchio.

USA becomes an ally again

And in this scenario, recently, the United States Treasury Department once again extended the protection of Citgo shares with respect to PDVSA 2020 bonds until October this year and warned that its auction would pose a threat to foreign policy and security. from United States.

With this, "the United States has made it clear to the judge that the protection and preservation of CITGO is even a matter of National Security , " he warned.

Thus, Vecchio emphasizes that the Interim Government's strategy to preserve CITGO has been possible thanks to executive orders issued by the Center, which has focused on guaranteeing the obtaining of protection measures from different instances of the United States Government: through OFAC of the Department of the Treasury, the Department of State and the Department of Justice before the District Court of Delaware.

In addition, another of the arguments to present in the defense of the case indicates that the conditions of the international market are completely unfavorable for the negotiation of the oil asset. The loss of Citgo would be irreparable for the assets of PDVSA and its creditors who are awaiting the re-structuring of their debts.

And who will pay the debt?

Pedro Jedlicka, Litigation Director of the Special Prosecutor's Office, explained that with the recovery of the nation's assets, debt restructuring processes with the creditors of the State would be advanced, once "the political transition is completed . "

However, Vecchio assured that the interim government intends to honor Venezuela's economic commitments, "as long as they have been legitimately acquired."

And the deputy Mata thus reinforces it: "No one has said that they do not want to pay, what we have said and it is in the agreements approved by the National Assembly is that the legitimate debt contracted by the Republic will be canceled and that merits a timely process review and verification of each obligation contracted. Not all the 150 billion dollars generated by Chávez and Maduro is legal or legitimate, " warned the MP