The CITGO auction, a valuable energy asset of Venezuela on U.S. soil, has sparked significant concern regarding the sovereignty of the nation. Beyond political allegations, who are the real culprits behind the impending transfer of this strategic asset to private hands?
This article delves into verified sources to explore how Hugo Chávez, Nicolás Maduro, and the interim government of Juan Guaidó — led by Horacio Medina — played crucial roles in this outcome.
What’s happening with CITGO?
CITGO Petroleum Corporation, a subsidiary of PDVSA in the United States, has been under pressure from multiple international creditors since 2017. The court auction in Delaware aims to liquidate its shares to cover over USD 21 billion in claims, many tied to past expropriations and unpaid debts.
On July 3, 2025, the USD 7.38 billion bid from Dalinar Energy (a subsidiary of Gold Reserve) was preliminarily selected as the winner, but its final approval hinges on a hearing scheduled for August 18 and the green light from the U.S. Treasury Department.
Hugo Chávez: The roots of the debt
Former president Hugo Chávez launched an aggressive nationalization campaign between 2005 and 2008, during which he expropriated companies like Crystallex. This behavior led to international lawsuits claiming compensation.
In 2017, the ICSID ruled in favor of Crystallex for USD 1 billion. These decisions laid the legal groundwork for claims that now threaten to strip Venezuela of its most valuable international asset.
Nicolás Maduro: Deepening the default
Nicolás Maduro inherited this crisis and exacerbated it. In 2016 and 2017, his government stopped paying external debt bonds, including the PDVSA 2020 bonds, which are backed by 50.1% of CITGO as collateral.
Additionally, he ignored ICSID arbitration rulings such as the case involving Gold Reserve for USD 1.2 billion. This failure to comply allowed creditors to pursue legal action in U.S. courts to enforce their claims on CITGO.
Guaidó’s interim government: Management failures and costly decisions
The interim government led by Juan Guaidó, recognized by the U.S. since 2019, took control of CITGO through a managing board. However, reports from The Washington Post and Venezuelanalysis.com highlight serious shortcomings, including failure to appear in court, resulting in default judgments like the one from ConocoPhillips in 2021 for USD 8.5 billion.
Corruption allegations further complicate matters, along with poor management and financial decisions that worsened CITGO’s liabilities, such as taking loans of USD 3.4 billion without stopping the drop in revenue.
Current state of the legal process
The recommendation from the court-appointed expert for the CITGO auction, Robert Pincus, favored Gold Reserve, yet faces opposition from bondholders of the PDVSA 2020, who still assert their rights against the collateral.
Other consortiums like Black Lion — which made a bid of USD 8 billion — and Vitol — which offered over USD 10 billion — did not qualify due to technical requirements. The final hearing on August 18 and the criteria from the U.S. Treasury will determine the outcome.
Responsibility overview
ActorActionImpact on CITGOHugo ChávezExpropriations without compensationCaused international lawsuitsNicolás MaduroDefaults on bonds and disregard for arbitrationsAllowed legal enforcementInterim Government (Guaidó)Poor management and court failuresIncreased debt and legal exposure
Conclusion: Shared responsibility
CITGO wasn’t lost due to a single action or moment. This tragedy unfolded over three administrations: Chávez planted the seed with reckless expropriations, Maduro facilitated financial and legal collapse, while Guaidó’s interim government failed to seize crucial opportunities to defend the asset.
Now, with the CITGO auction underway and multiple interests at stake, Venezuela stands to lose a critical piece of its economic sovereignty. History will judge each actor, but the facts are already clear.
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