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The Citgo sign stands near Boston University in Boston, Massachusetts, U.S., on Monday, April 20, 2020. (Photo: Adam Glanzman/Bloomberg)

Venezuela’s PDVSA responds to judicial sale of Citgo Petroleum

The Citgo sign stands near Boston University in Boston, Massachusetts, U.S., on Monday, April 20, 2020. (Photo: Adam Glanzman/Bloomberg)

While calling the judicial sale of shares CitgoPetroleum an act of fraud and “modern piracy”, Petroleo de Venezuela SA (PDVSA), in a release, said it denounces the judgement of the District Court of Delaware, in the United States, which the court issued last week Thursday, May 22.

The American court passed the judgement after hearing a case in which Canadian gold-mining company Crystallex brought a suit against the Bolivarian Republic of Venezuela, for CN$1.4 billion, claiming the country disposed of its assets in a State takeover in 2011.

(File Photo)

To recoup its losses, the now-defunct Crystallex sought the forced sale of Citgo Petroleum, a subsidiary of PDVSA, according to a Bloomberg article.

An illegitimate act

In response to the ruling, the State-owned Venezuelan company noted, “With this ruling, the existence of a plan by the US Government to confiscate PDVSA assets in the United States is clear.”

The oil and gas company further contends that its US-based subsidiary, Citgo Petroleum, had no relations or business dealings with the defunct Canadian gold-mining company and, therefore, the District Court of Delaware should not have awarded Citgo’s shares to Crystallex.

“This judgement seeks to execute an award issued by the Arbitration Tribunal of the International Center for Settlement of Investment Disputes (ICSID), for a value of 1.2 billion [US] dollars, based on a claim made by the Canadian company Crystallex against the Bolivarian Republic of Venezuela, even though neither PDVSA, Citgo, nor PDV Holding, are debtors to Crystallex nor were they subject to the procedure before the ICSID Arbitration Tribunal,” the release stated.

The company also disputed the legitimacy of the legal representation which it received in the American court, pointing out that the “lawyer who fraudulently pretends to represent the Republic has actually worked as a legal adviser to the Crystallex company…”

A warning to other countries

PDVSA, in the release, cautioned countries with assets in the United States to pay keen attention to the case, especially the actions of the United States Government.

The Citgo sign stands near Boston University in Boston, Massachusetts, US, on Monday, April 20, 2020. (Photo: Adam Glanzman/Bloomberg)

“Faced with this act of arbitrariness and modern piracy, the international community, particularly those with investments in the United States, should remain very vigilant in this case, since it is indicative of the actions that the United States is willing to carry out even against the international and internal legal order, to assert their interests on strategic foreign investments,” PDVSA stated.

The Venezuelan company stated further that it will continue to defend its assets on the international level.

Supreme Court appeal

Follow the issue of the release from PDVSA, a Bloomberg report revealed that the US Supreme Court had rejected an appeal from the Government of Venezuela to retain control of Citgo.

The US Supreme Court recently rejected an appeal from the Government of Venezuela to retain control of Citgo. (Photo: supremecourt.gov)

“Venezuela and its national oil company, Petroleos de Venezuela SA, or PDVSA, asked the Supreme Court to review the appeals court ruling, saying it conflicts with a federal sovereign immunity law. Crystallex urged the Supreme Court not to hear the case,” the article noted.

Bloomberg pointed out, too, that Crystallex was not the only company staking a claim to Citgo’s shares as a reward and named ConocoPhillips as another creditor of the Venezuelan company.