The judicial auction of CITGO Petroleum Corp., a U.S. subsidiary of PDV Holding Inc., is entering its final days, and a new player has caught the market by surprise. Amber Energy, an affiliate of the New York-based investment firm Elliott Investment Management, submitted a last-minute bid of $8.82 billion, as stated in a letter filed in the Delaware legal proceedings cited by Bloomberg News.
PDV Holding, a U.S. subsidiary of the Venezuelan state oil company PDVSA, is the sole indirect shareholder of CITGO, which owns and operates refineries in Lake Charles, Louisiana; Lemont, Illinois; and Corpus Christi, Texas, with a combined capacity of approximately 807,000 barrels per day, making it the fifth-largest independent refiner in the United States. Additionally, CITGO operates 42 terminals, eight pipelines, three lubricants plants and supplies fuel to over 4,300 independent service stations in 31 states across the U.S., all east of the Rocky Mountains.
The story of CITGO in the United States dates back to 1965, when Cities Service Co. established the brand. It later changed hands to Occidental Petroleum and Southland Corp., the founder of 7-Eleven, before being fully acquired by PDVSA in 1990. Since 2020, the company has been for sale amid political and economic instability in Venezuela, U.S. sanctions, and concerns about potential Russian interests in the firm.
Although CITGO remains owned by Venezuela, it has been operating under a U.S. license since 2019, which protects it from creditors. Therefore, any buyer requires approval from the U.S. Department of the Treasury to finalize the acquisition.
Amber Energy, based in Houston, made its bid last weekend, competing with other bidders, including pending agreements with bondholders seeking stakes in PDV Holding, according to a letter from Red Tree Investments LLC, a Venezuelan creditor and previous bidder. This proposal includes $5.86 billion for creditors, in addition to resolving $2.86 billion in claims against PDVSA, totaling $8.821 billion, which includes breakup fees.
The announcement complicates the lengthy legal battle of Venezuelan creditors to seize PDV Holding and recover over $20 billion in claims. Amber Energy had previously attempted to purchase the company unsuccessfully and decided to re-enter this round mid-year.
The Delaware judge, Leonard Stark, has scheduled the sale hearing for August 18, after which the winner of the auction is expected to be determined. So far, the detailed terms of Amber Energy’s offer have not been made public.