Citgo: Venezuela seeks six months for talks that OFAC does not authorize

On October 13, the Justice Department answered the Third Circuit Court of Appeals’ third invitation in two sentences: the United States “has no views to express at this time” on the Citgo litigation. The court had asked on December 15, on January 5 and on October 5. The last request came four days after Venezuela asked to freeze its appeal against the sale of the refiner for six months, saying it needs Citgo to restructure its debt.

Venezuela built its request on the new relationship with Washington, and one of the two creditors that backed it, Gold Reserve, did so “subject to concurrent support from the United States.” That support never reached the docket. On October 21 the court hears argument on the sale to Amber Energy, part of the Elliott group, and the motion for a pause is still pending.

A case from 1997

To ask for the pause, Venezuela chose a precedent: Pravin Banker v. Banco Popular del Perú, decided by the Second Circuit Court of Appeals in March 1997. Peru was then renegotiating its commercial debt under the Brady Plan and asked the courts to halt collection by a creditor that had stayed out. Even a detail repeats itself: that court also asked the US government for its views, and the US Attorney’s office declined to submit a statement of interest.

In its October 1 motion, Venezuela cited that abstention as what set the old case apart from its own. This time, it argued, the executive branch had set a policy by authorizing it to hire restructuring advisors. Since October 13, Washington has declined to opine in both cases.

Pravin also shows what six months buy. The trial judge granted a pause of that length, but to allow the liquidation of a bank in Peru to finish. The indefinite pause for the country to complete its renegotiation was denied, and the appeals court agreed: holding collection in suspense until the end of a process with no set date would have turned a voluntary negotiation into the equivalent of a judicially enforced bankruptcy. Peru’s Brady agreement closed in March 1997, after many delays.

That is where the resemblance ends. Peru was negotiating within a framework supervised by the IMF, with a bank committee that had agreed to stay its own lawsuits. Those claiming Citgo are not waiting for a bond swap: they hold judgments, attachments on the shares and a sale approved by a Delaware judge.

What Washington has said

In March, a New York judge asked Washington the same question in another creditor case against Venezuela, and the answer had two parts. On who represents the country, it was explicit: the government of the acting president, recognized on March 5 as the only one with authority to act on Venezuela’s behalf. On everything else, it declined to opine “at this time.” The State Department added a warning: the United States continues to closely scrutinize transactions with the interim authorities and will use the International Emergency Economic Powers Act, among other tools.

What it thinks about Citgo, by contrast, it has written into licenses. Placed side by side, they say what Venezuela can do with its refiner in the United States.

Venezuela told the court that Citgo generates billions in dividends and that it intends to use them for its economic recovery and its debt. Under current licenses it cannot appoint the people who run the company or sit down to negotiate with those who attached it, and according to Crystallex the attachment also reaches the dividends, which PDV Holding must hold until the court orders otherwise. Two of those three doors depend on OFAC; the third, on a Delaware judge who has already ordered a sale.

The pause Venezuela is asking for opens none of the three.

The licenses in the table are not the only decisions on Citgo that the Treasury keeps open. The other pledge, the Citgo Holding shares committed to the PDVSA 2020 bond, runs through a separate case, and the license that would allow it to be enforced has been replaced so many times it has reached the letter Z.

The date everyone cites

Amber, Crystallex and Venezuela agree on a date and disagree on what it means. The first two argue that the financing for the purchase and the agreement with the 2020 bondholders expire in April 2027, that extending them would require the unanimous consent of the parties, and that a six-month pause would prevent the sale through mere delay, without any court reviewing it. Venezuela replies that April only marks when Amber and those bondholders must agree whether to extend their financing, and that the case will continue past that date, pause or no pause.

Six months counted from October end in April.

The contract with Amber already lives on extensions. It was signed on September 19, 2025 with twelve months to close, and its own clause extends it in 90-day periods, up to a maximum of 180, when what is missing is, among other conditions, the OFAC license. Beyond that, only the Delaware court can lengthen it.

The attachments, however, do not expire in April. According to ConocoPhillips, the judgments secured on the PDV Holding shares exceed $20 billion, above even the most optimistic projections of Citgo’s value, and Crystallex warns that a failed sale would force the auction to be relaunched. If the clock runs in Venezuela’s favor, it gains time; the shares remain attached.

For its economic argument, Venezuela relies on a figure from Citgo itself: EBITDA of $5.8 billion in 2026, nearly equal to Amber’s offer, which Venezuela puts at $5.9 billion. It is a projection built on forward curves as of late July and assuming no material change in working capital. At the end of June, Citgo reported $2.9 billion in liquidity and expected to end the year with $5.7 billion in cash; in its October 13 filing, Venezuela spoke of $5 billion “available.” The first half produced EBITDA of $1.749 billion, so, by our own calculation, the projection implies a second half more than twice as large.

After the 21st

The court can rule on the motion before argument, at the hearing or afterward, and what it decides takes Venezuela down different roads.

Three documents will show where this is heading: the order on the motion for a pause; any new license that names PDV Holding or Citgo, whether to authorize the sale or to let Venezuela negotiate; and Citgo’s third-quarter results, which will show whether cash is on track for the $5.7 billion the company projected.

Washington gave Venezuela back its voice in the courts in March. What Venezuela can do with Citgo, it is still writing into licenses.