Elliott Investment Management’s affiliate, Amber Energy Inc., has proposed a revised offer to acquire oil refiner Citgo Petroleum Corp. (“Citgo”), a US based oil company that refines, transports and markets industrial products, responding to mounting criticisms of its initial bid.

Creditors and Venezuela raised objections to Elliott Management’s (via Amber Energy) initial USD 7.3 billion offer for Citgo, citing concerns about its trust-based payment structure and certain closing conditions. Creditors contended that routing payments through a trust complicated their ability to collect directly, creating obstacles to accessing funds. Meanwhile, Venezuela, represented by its political opposition, resisted terms it deemed unfavourable to its national interests, further complicating negotiations. A specialist in oil industry financing added, “Creditors consider that the initial offer of USD 7.3 billion does not represent the true market value of Citgo.”

“Creditors consider that the initial offer of USD 7.3 billion does not represent the true market value of Citgo.”

Specialist in oil industry financing, Venezuela

Amber Energy’s updated USD 7.3 billion proposal includes allocating over USD 2 billion into an escrow account to address claims from Venezuela’s state-owned oil and natural gas company (“PDVSA”) 2020 bondholders. These bondholders are involved in ongoing litigation over debts linked to PDVSA, complicating the resolution of broader creditor disputes tied to Citgo and Venezuela’s debt crisis. 

However, with 96% of creditors filing objections to the first offer and the Venezuelan political opposition also raising concerns, it is unclear if the revised bid sufficiently satisfies all parties. “None of the Elliott/Amber offers seem likely to succeed,” asserted the specialist in oil industry financing. The inclusion of changes to closing conditions requiring Third Circuit affirmation adds a layer of complexity and potential delays, leaving room for competing offers during the ongoing topping period*.

According to the oil financing specialist, “Venezuela’s position is irrelevant in the proceedings conducted by Judge Stark as it is an insolvent debtor that has no role in this phase of the judicial proceedings.” However, Venezuela, represented in US courts by its political opposition, has a say in the Citgo sale process because it owns PDV Holding, Citgo’s parent company.

“Venezuela’s position is irrelevant in the proceedings conducted by Judge Stark as it is an insolvent debtor that has no role in this phase of the judicial proceedings.”

Specialist in oil industry financing, Venezuela

Through its state-owned oil company Petróleos de Venezuela S.A., Venezuela owns 100% of PDV Holding, a critical part of Venezuela’s foreign asset portfolio, with Citgo valued between USD 8.1 billion and USD 23.5 billion. Despite this ownership, control over Citgo has been in the hands of an opposition-led ad hoc PDVSA board since 2019, following US recognition of opposition leader Juan Guaidó’s legitimacy.

Numerous challenges have delayed the sale process, so the timeline is unclear. The most recent bid of USD 7.3 billion is still under scrutiny, with final approval dependent on settling related claims and ensuring compliance with US court rulings. “Even if all the requirements of Judge Stark’s trial were met, including the Office of Foreign Assets Control’s (“OFAC”) final authorisation for the sale, there would always be the threat that creditors who could not collect would file for bankruptcy of PDV Holding or even PDVSA (the Venezuelan parent company) in a US court (Chapter 11),” cited the oil industry specialist.

For creditors owed over USD 20 billion by Venezuela, it could take years before substantial payments are made, as the process involves a court-ordered sale and multiple competing bids. According to our sources, “There are NYC lawyers who are optimistic about the possibility of collection in the Stark trial and who believe that collection could occur by mid-2026, but our sources indicate that, although they hold that position publicly, they probably think the opposite in private.”

As for the future of PDV Holding and Citgo, they remain embroiled in the legal and political battles surrounding Venezuela’s debt obligations. The country’s long-standing economic nightmare, compounded by US sanctions and the opposition’s control over PDVSA, complicates any prospects of a speedy resolution.

*Topping period: a designated time frame during a sale process in which other interested buyers can submit competing offers for an asset, often to ensure the seller secures the best possible deal.