The CITGO auction has a new bid of USD 10 billion, presented by Blue Water Venture Partners LLC, but the response has been almost unanimously negative. Only the Venezuelan parties, namely Petróleos de Venezuela S.A. (PDVSA), PDV Holding Inc. (PDVH), and CITGO Petroleum Corporation (CITGO)—requested the Delaware Court to review the proposal.
The bidders suggest that the judicial creditors could choose between immediate cash upon closing or equity in a public company listed on NASDAQ. It also includes a liquidation fund for holders of the PDVSA 2020 bonds.
Both the judicial expert for the CITGO auction, Robert B. Pincus, along with Crystallex International Corporation and ConocoPhillips, have asked Judge of the case, Leonard P. Stark, to reject the offer. Only Venezuela believes it could provide greater compensation to creditors than the currently recommended offer.
The Bid by Blue Water Venture Partners for CITGO
Blue Water Venture Partners LLC has submitted an offer for USD 10 billion for PDV Holding Inc., the parent company of CITGO Petroleum Corporation, aiming to secure U.S. control over energy assets and transform it into a publicly traded company offering equity options to creditors.
The firm—founded by energy, technology, and health investment specialist Joseph Hernández—has asked the Delaware Court to review its bid for the Venezuelan refinery owned by PDVSA. This offer excludes those from Amber Energy and Gold Reserve.
The proposal allows judicial creditors to choose between immediate cash at closing or participation in a public company listed on NASDAQ. Additionally, it sets aside a liquidation fund for holders of PDVSA 2020 bonds.
Blue Water Seeks to Order Judicial Expert to Consider Its Offer
On September 29, 2025, Blue Water Venture Partners LLC, through its lawyer, John C. Gentile, requested Judge Leonard P. Stark of the United States District Court for the District of Delaware, to approve and instruct the CITGO auction’s judicial expert, Robert B. Pincus, to consider its unsolicited offer of USD 10 billion for CITGO’s assets.
Key elements of the proposal include a dual-option structure for creditors with attached judgments, allowing them to select either an immediate cash payment or convert to equity in a public company listed on NASDAQ.
Furthermore, the offer allocates USD 3.02 billion to settle claims from holders of PDVSA 2020 bonds, with the goal of ensuring the transfer of CITGO’s assets is “clean and free of litigation.”
The motion is presented as a procedural necessity, since the current Scheduling Order doesn’t grant the judicial expert the authority to interact with bidders without an explicit directive from the Court.
The decision by Judge Leonard Stark came the next day when he ordered:
The judicial expert and any other interested entity may submit a writing, no more than three pages, expressing their stance on the motions by Friday, October 3; and
Blue Water must submit a writing, also no more than three pages, in response to any other letters received, by Tuesday, October 7.
Judicial Expert Dismisses Blue Water’s Offer
On October 3, 2025, Myron T. Steele, on behalf of the judicial expert, Robert B. Pincus, submitted a communication to Judge Stark addressing Blue Water Venture Partners LLC’s motion for the court to consider its unsolicited bid for the PDVH Shares.
The judicial expert for the CITGO auction argued that Blue Water’s offer is not a feasible or compliant proposal because it lacks committed financing and presents numerous contingencies, such as the need to resolve issues with the holders of PDVSA 2020 bonds.
Moreover, he noted that the proposal involves a SPAC transaction that adds risks and uncertainty to the already advanced sales process. Thus, Robert B. Pincus concluded that the offer, in its current form, is only an expression of interest that does not deserve serious consideration at this time.
Contingency/RiskDescriptionCurrent Status According to the Judicial Expert
Tholders of PDVSA 2020 Bonds
The proposal includes an agreement with the holders of PDVSA 2020 bonds.
Blue Water has not provided any evidence of its ability to address this risk, nor has it indicated that discussions for an agreement have commenced.
Judicial Creditors
It proposes to pay judgment holders with cash or non-monetary consideration (equity).
There are no commitments from creditors to accept equity. The offer only includes a footnote stating that “some creditors have indicated their willingness to accept shares in a settlement,” which is not a binding agreement.
Transaction Structure (SPAC)
The offer would be executed through a special purpose acquisition company (SPAC) listed on NASDAQ.
This structure introduces significant risks, including the need to prepare and file a registration statement with the SEC, SEC review, a vote from SPAC’s shareholders, and compliance with NASDAQ listing requirements. These hurdles have proven a historical challenge for SPAC transactions and add considerable uncertainty regarding the completion of the sale.
Despite its current position, the judicial expert remains open and states that if Blue Water sufficiently advances in its offer before the entry of a sale order on the currently contemplated schedule, he would be happy to consider the bid under the Court’s direction.
Crystallex Rejects Blue Water’s Offer for CITGO
On October 3, 2025, Crystallex International Corporation expressed its opposition before the Court for the District of Delaware to Blue Water Venture Partners LLP’s request to allow the judicial expert to consider its potential offer for the shares of PDVH.
The main objection is that Blue Water’s proposal does not qualify as a genuine offer, as it is described as a “funding plan” relying on “yet uncommitted” funds from unidentified investors. It argues that accepting this uncertain proposal would divert the judicial expert from critical and already scheduled tasks in the CITGO auction process, imposing undue costs on creditors.
Therefore, Crystallex requests that Blue Water’s Motion be denied because it does not meet the criteria for a qualified offer, which must be unconditional and without financing contingencies.
ConocoPhillips Requests Denial of Blue Water’s Offer
On October 3, 2025, ConocoPhillips requested Judge Leonard P. Stark to deny Blue Water’s motions, which seek to expedite consideration of its acquisition offer by the judicial expert.
Garrett B. Moritz, on behalf of ConocoPhillips, argued that Blue Water’s motions should be denied without prejudice since it lacks committed financing and is only “moving toward full confirmation of funds,” while the court is already actively reviewing an offer with fully committed financing.
ConocoPhillips suggests that Robert B. Pincus should not waste resources assessing non-viable offers at this time. They concluded that Blue Water may renew its motions only if it presents proof of fully committed financing and a purchase price significantly higher than the already recommended offer.
Venezuelan Parties Request Consideration of Blue Water’s Offer
On October 3, 2025, the Venezuelan parties—Petróleos de Venezuela, S.A. (PDVSA), PDV Holding, Inc. (PDVH), and CITGO Petroleum Corporation (CITGO)—indicated to the court that they do not oppose the court ordering the judicial expert to consider Blue Water’s proposal, as it could offer greater compensation to creditors than the currently recommended offer.
PDVSA, PDVH, and CITGO noted that actions already taken by the judicial expert, Robert B. Pincus, have proactively assessed Blue Water’s proposal, even before a formal court directive. This can be inferred from the evaluation contained in his response to the Court’s order.
The main argument for the offer is that it “aims to provide a higher compensation to attached judicial creditors than the offer currently recommended by Robert B. Pincus.
Venezuelan parties estimate that the offer “could mature and become a compliant offer, if it is not already.” This suggests that, although it may not be perfect in its current state, it has the potential to meet all necessary requirements.