From The Wall Street Journal
Venezuela’s Citgo Petroleum Corp. is considering various options, including filing for bankruptcy in the U.S., to protect its operations amid a fight between the Trump administration and Venezuela’s ruling leftist government over control of the South American country’s state-owned energy assets, according to people familiar with the matter.
Citgo, one of the largest refiners in the U.S., is weighing its options while the White Houseattempts 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.
Control of the Venezuela’s state-owned assets are 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, people familiar with the matter said.
A Citgo spokesman said Thursday the company is “profitable, solvent and has contingency plans to successfully manage the recent events.” The spokesman didn’t address the possibility it could file for bankruptcy.
While Citgo’s financial pressures aren’t acute, filing for court protection 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, according to the people familiar with the matter.
Citgo, owned by state oil giant Petróleos de Venezuela SA, or PdVSA, is relying on law firm Willkie Farr & Gallagher LLP for legal advice on several contingency plans, a person familiar with the matter said. The firm didn’t respond to a request for comment.
The list of creditors circling Citgo as a source of repayment includes PdVSA bondholders, Russian state oil company OAO Rosneft and several North American companies that had their operations in Venezuela seized and nationalized.
The U.S. imposed sanctions on PdVSA earlier this week in a bid to cripple the Maduro government.
Citgo runs several refineries along the U.S. Gulf Coast that support more than 3,000 U.S. jobs and supply thousands of Citgo-branded gasoline stations.
U.S. officials say they are working to ensure Citgo, which represents around 5% of U.S. refining capacity, stays operational as they try to transfer control of the company and the country’s other assets to Mr. Guaidó.
