In a new twist in the complex legal saga for control of Citgo Petroleum, the most valuable U.S. refinery of Venezuela, Canadian miner Gold Reserve (GRZ.V) has launched a fresh legal offensive against its temporary partner, Rusoro Mining (RML.V). The company alleges that Rusoro has violated a consortium agreement in the bidding for Citgo’s parent company, PDV Holding, and is seeking a court order to exclude it from the auction process overseen by a Delaware court. This lawsuit, filed under seal over the weekend, threatens to further prolong an auction that is already plagued by eight years of disputes and could redefine the fate of one of Caracas’s most sought-after foreign assets.
The Heart of the Dispute
A Broken Consortium Amid Million-Dollar Bids. The auction of PDV Holding, driven by a federal court in Delaware, aims to liquidate shares of the Venezuelan company to settle up to $19 billion in debts and compensations to 15 creditors affected by expropriations and defaults by Nicolás Maduro’s government. Citgo, with key operations in Texas and New York refineries, represents a prize estimated in billions, and its sale has attracted global players in a battle that intertwines finance, diplomacy, and corporate feuds.
Last August, an affiliate of Elliott Investment Management, Amber Energy, emerged as the preferred bidder with a $5.9 billion offer, which was judicially recommended over Gold Reserve’s $7.9 billion proposal despite being lower in amount. Both bids shared a key element: the inclusion of a $1.5 billion claim from Rusoro for expropriated assets in Venezuela, integrated into the consortium’s financing scheme.
However, according to Gold Reserve, Rusoro has “knowingly and materially” breached its contractual obligations by acting independently, jeopardizing the miner’s participation in the process. “We believe that Rusoro violated its commitments under the consortium agreement in connection with the court-supervised auction of Citgo in Delaware,” the company stated in a press release, requesting a preliminary injunction to prevent Rusoro from “taking steps to finalize the impending purchase of PDV Holding’s shares.”
The lawsuit, filed in the Delaware Chancery Court, does not publicly detail Rusoro’s specific actions, but sources close to the case indicate that the conflict revolves around maneuvers to exclude Rusoro’s claim from Gold Reserve’s bid structure, which could disqualify the miner.
Response from Rusoro
“An Attempt to Block the Sale.” Rusoro, based in Vancouver and focused on gold exploration in Venezuela, has not issued an immediate public statement, but its lawyers notified the Delaware court on Sunday about Gold Reserve’s filing.
In court documents, the miner argues that the action by its former partner is a “recent effort to interfere with the judicial sale” and seeks to “block the auction of PDV Holding’s shares” through an injunction in another court. Rusoro reserves “the right to take any appropriate legal actions” once it reviews the documents.
Meanwhile, Amber Energy, the leading bidder, reacted swiftly on Monday, asking Judge Leonard P. Stark—who oversees the main auction—to order Gold Reserve to disclose details of the complaint and convene a conference to coordinate steps with the affected parties. “The unequivocal purpose is to block the sale,” Amber’s representatives stated in the record.
Background: An Auction Stuck in Conflict and Suspicion
This is not the first legal maneuver in a process that has gone through three bidding rounds since 2017, when creditors like Crystallex and Tenaris initiated actions against Venezuela for expropriations. Gold Reserve, which lost its mine in the South American country in 2011, has its own $1 billion claim at stake.
Last month, both Gold Reserve and Venezuelan representatives filed motions to disqualify Judge Stark and the court advisors for alleged conflicts of interest, citing ties to rival bidders. These pending requests add to objections that have prevented a final decision on the winner, expected this November.
Judge Stark has not confirmed Amber Energy as the definitive winner, leaving the control of Citgo—a processor of 800,000 barrels of crude daily—in limbo and exposing tensions between international creditors and the Maduro regime, which has labeled the auction as “imperialist theft.”
Implications Beyond the Mines: A Precedent for Venezuelan Assets
The dispute between Gold Reserve and Rusoro illustrates how business rivalries complicate the resolution of sovereign debts. For Venezuela, losing Citgo would mean ceding a vital economic pillar, used as collateral for loans and a source of foreign currency. Analysts estimate that the auction could inject up to $8 billion net into the treasury, but only if pending litigations are resolved.
In the market, Gold Reserve shares fell by 2% on Monday on the Toronto Stock Exchange, while Rusoro remained stable, reflecting uncertainty. International law experts warn that this case could set a precedent for other claims against Venezuelan expropriations, from mines to defaulted bonds.
As the judicial clock ticks, the question remains: will Gold Reserve manage to turn the tables, or will this lawsuit only deepen the stalemate? The Delaware court will have the final say, but in this opera of billion-dollar ambitions, no one seems willing to give ground.