CITGO: selling it does not settle the debt; Venezuela would lose the refiner and still owe

The CITGO sale approved in Delaware splits about $5.8 billion among creditors whose judgments, attached to the shares of PDV Holding, total more than $20 billion. The sale order treats each judgment as paid only to the extent of what it receives, and extinguishes it as to the buyer and the shares. As to the Republic, the balance survives. ConocoPhillips shows it with its own case: its judgment against Venezuela, about $11.5 billion, ended up 14th in line and recovers nothing from this sale.

If the deal closes, by our own calculation more than $14 billion of those judgments would remain unpaid. Venezuela would lose the refiner and still owe most of what was being collected through it.

Where the judgments come from

PDVSA bought half of CITGO in 1986 and the rest in 1990. The judgments that now weigh on it stem from the expropriations after 2007. That year ConocoPhillips lost its oil projects in Venezuela, and in 2016 Crystallex obtained court confirmation of an award over the expropriation of its gold project: a judgment that Venezuela’s own brief puts at $1.4 billion.

For the Republic’s debts to reach a PDVSA company, one more step was needed. In 2018 the Delaware court treated PDVSA as the Republic’s alter ego because of the extensive control the state exercised over it, although it found no fraud, and the Third Circuit affirmed Crystallex’s attachment. The auction rules were set in October 2022. In May 2023 the Office of Foreign Assets Control (OFAC) said it would not penalize the preparatory steps, and that the sale would need another license before being executed.

The pledges have dates too. In 2016 PDVSA itself offered to swap its bonds due 2017 for new ones due 2020 secured by control of CITGO Holding, and that same year it pledged the remaining 49.9% as collateral for a $1.5 billion prepayment from Rosneft. That second pledge was recovered in June 2023 under an OFAC license.

The first one still stands.

The auction was decided in November 2025. Amber Energy, part of the Elliott group, offered $5.892 billion for the judgment creditors and a separate $2.125 billion agreement with the 2020 bondholders. Dalinar, a Gold Reserve affiliate, raised its bid to about $7.9 billion and assumed the risk of those holders’ claim, without an agreement with them. For ConocoPhillips, that was the central difference between the two. The judge approved Amber’s bid and signed the sale order at the end of that month.

Three keys that are not in Caracas

To keep CITGO, Venezuela would have to open at least one of three doors. None depends on Venezuela alone.

The argument that would change everything

Venezuela argues before the Third Circuit that the applicable federal rule points to Delaware law, and that Delaware law requires proof of fraud, not just control, to seize the property of someone who is not the debtor. The trial court found no fraud. If the argument prevails, the attachments of the Republic’s creditors fall. It does not reach all of them: ConocoPhillips notes that two of its judgments are against PDVSA and that those attachments do not depend on that dispute.

The other objections, the price and the ties that Venezuela and Gold Reserve attribute to the process advisors, go to the form of the sale. If they prevail, the auction returns to Delaware with the attachments in place, because Crystallex’s was already affirmed by the same court. The judges heard argument on October 21 and the transcript reached the docket on November 4. As of November 12 there is no ruling, nor an order on the six-month pause Venezuela requested on October 1.

The Treasury, which does not opine

The policy OFAC set in May 2023 favors authorizing the sale, “without prejudice to reconsideration” if US foreign policy and national security interests materially change. Since March, Washington has recognized a different government in Caracas.

It has not said whether that counts.

On October 13 it told the Third Circuit, which had invited its views in December, January and October, that it has no views to express. On October 27, the Second Circuit noted that neither the United States nor the government recognized in Caracas had told it whether the new relationship should affect the 2020 bond case.

A license that never comes halts the sale, but does not give the refiner back. Amber warns that the financing for the purchase expires in April 2027, and Crystallex that a longer delay could unravel the payment to the 2020 bondholders and force a relaunch of the auction. The attachments would stay where they are.

The price of keeping it

The third route does not wait for a ruling: pay or settle with those who hold the shares under attachment. In our reading, the auction itself sets the floor for that negotiation. No creditor has reason to accept less than the sale would give it, so a deal would have to cover at least what Amber pays, about $5.9 billion, and separately resolve the 2020 bond pledge, which Amber cleared with $2.125 billion. Creditors the sale leaves unpaid, such as ConocoPhillips with its largest judgment, would also have something to ask for.

The company’s money is now approaching that figure. CITGO reported on November 12 net income of $2.2 billion in the third quarter, its best quarter on record, compared with $936 million in the second. It ended September with $4.9 billion in liquidity and projects 2026 EBITDA of $7.2 billion to $7.5 billion and $6.7 billion to $7 billion in cash at the close of 2026. In August, its EBITDA projection was $5.8 billion.

Two caveats weigh on those figures. The first is the cycle. In August, the company attributed its margins to global supply disruptions, and on November 12 it wrote that refining markets reflect a tight supply-demand balance and a geopolitical risk premium. According to Venezuela’s brief, the judge set aside the valuation of the process’s own bank because CITGO had underperformed projections in 2023-25. If the price was set looking at weak years, judging it by 2026 margins makes the opposite mistake. The second is access: according to Crystallex, its attachment reaches the right to receive dividends, and the court ordered PDV Holding to hold them until further order.

The cash stays at CITGO.

Who signs for Venezuela

On October 1, Venezuela told the Third Circuit that CITGO is its most valuable international asset and that it intends to use its dividends for its economic recovery and to address its debt. Even with the money, someone has to negotiate. License 58, from May, lets the Venezuelan government hire lawyers and advisors to prepare a restructuring, and expressly excludes direct negotiations with creditors and the signing of any settlement. Among the program’s general licenses in force, the one that authorizes negotiating settlements of debt of the Republic and PDVSA is License 42, from May 2023. Its counterpart is the National Assembly seated in January 2016 and the people it appointed, ad hoc boards included. It is not the government Washington has recognized since March as the only one with authority to act for Venezuela.

License 52C, from September 14, closes another door: it bars any transaction to alter the governance of PDV Holding, CITGO Holding or CITGO Petroleum, including appointing or removing directors. At the October 21 hearing, PDVSA’s counsel said the state company intends to appoint new boards at PDV Holding and CITGO. Under the licenses in force, CITGO is owned by Venezuela and run by people its government cannot replace.

Same question, different answer

Washington has stepped in to protect another country’s asset. In July 2025 the Justice Department appeared as amicus before the Second Circuit to back a stay of the order requiring Argentina to hand over its 51% of YPF to the plaintiffs. On March 27, 2026 that court reversed the $16.1 billion judgment on grounds of Argentine law and, with it, vacated the turnover order. The plaintiffs took the case to the Supreme Court in September.

The comparison has a limit, and it should be stated. Washington’s argument in the Argentine case was that the exceptions to execution immunity concern property located in the United States, and the YPF shares were in Argentina. The PDV Holding shares are in Delaware. What the law does not settle is the decision to speak up.

In CITGO’s own case, in July 2020, when it recognized the Assembly elected in 2015 as the government, the United States filed a statement of interest in favor of revisiting the alter ego ruling. According to Venezuela’s brief, Washington described CITGO to that court as a “national resource” and “a central piece of the national patrimony.” In 2026, with a different counterpart in Caracas, it has not opined.

The same yardstick runs the other way. ConocoPhillips lost its projects in 2007 and Crystallex turned its award into a judgment in 2016. Every route that delays the closing is paid for by them in time, and one that leaves CITGO in Venezuelan hands without paying them would be paid for with their claims.

What decides the outcome

Three documents will show whether CITGO remains Venezuelan: the Third Circuit’s ruling on the sale order; any new license naming PDV Holding or CITGO, whether one authorizing the closing with Amber, a version of License 58 that allows negotiation, or one of License 52C that allows board changes; and the expiry of Amber’s financing in April 2027.

The other case runs separately. The 2020 bond pledge over CITGO Holding is governed by the License 5 series. License 5AA, signed on November 4, the eve of the date set by its predecessor, moved the authorization to December 18. According to OFAC, since October 24, 2019 there has not been a single day with that authorization in effect.

What it would cost to keep CITGO can now be calculated. Who may negotiate it is decided, for now, by a license.