A bevy of right-wing groups are asking the Trump administration not to intercede on behalf of the Venezuelan opposition government to keep Citgo Petroleum from being seized and auctioned.
The Houston-based refiner Citgo is owned by Venezuela’s state oil company, and it’s considered a valuable asset to help Venezuela rebuild if there’s regime change in favor of the Trump-backed Juan Guaido opposition government.
However, a U.S. federal appeals court ruling this week said a defunct Canadian mining firm that was owed $1.4 billion by Venezuela may seize the shares of Citgo, triggering a chain of events that could auction Citgo off to the highest bidder, potentially including other U.S. refiners such as San Antonio-based Valero Energy or Ohio-based Marathon Petroleum.
Barring further appeals, executive action from the White House may be the best way to keep Citgo from being seized as a result of the court battle.
A coalition of conservative groups though is asking Trump not to get involved given Venezuela’s track record under the leadership of former socialist president Hugo Chavez and the current embattled leader Nicolas Maduro as Venezuela plunges deeper into its financial and geopolitical crisis.
“Instead of taking executive action that could chill private investment in Venezuela, the Trump Administration should seek to help rebuild the country without violating property rights and the rule of law protected by the United States Constitution,” the groups wrote in a letter Wednesday.
Executive action would prevent the many companies owed money by Venezuela and its state oil company from recouping their unfair losses, they said.
“Instead, the administration should urge the interim Venezuela government to follow existing processes to restructure its debt and to deal with its legitimate creditors within the framework set out by existing legal regimes and court processes,” they added.
The letter was signed by Grover Norquist’s Americans for Tax Reform, FreedomWorks, Heritage Action and other conservative groups.
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In the power struggle with the Maduro government, the Trump administration has recognized the opposition government of the National Assembly leader Juan Guaido, who earlier this year appointed board of directors to oversee Citgo.
The Guaido board ousted directors and executives loyal to Maduro. The Maduro board, however, has in a separate case asked a federal court to return Citgo to its control.
Citgo, a U.S. company with a more than 100-year history, was acquired by PDVSA about three decades ago and owns oil refineries in Corpus Christi, Lake Charles, La., and Illinois. It employs about 4,000 people in the United States, including about 800 in Houston.
The Canadian mining firm, Crystallex International and other companies owed money by the Venezuelan government and the national oil company PDVSA are eyeing Citgo as the best way to recoup their losses. Citgo is a profitable business that produces significant revenues, although U.S. sanctions prevent Citgo’s earnings from being repatriated to Venezuela.
