For more than a decade, Venezuela has stood as one of the world’s starkest examples of sovereign risk. Yet the court-ordered sale of CITGO, the US-based oil refiner and Venezuela’s most valuable overseas asset, shows that the next chapter is being shaped less in Caracas than in US courtrooms.

The Delaware process has become a landmark test of how international investors assess sovereign risk, cross-border ownership and the protection afforded by US legal institutions.

In late 2025, Delaware Judge Leonard Stark approved a USD 5.9 billion bid from Amber Energy, an affiliate of Elliott Investment Management, to acquire PDV Holding, the parent company of CITGO Petroleum. The court-supervised auction was designed to compensate around 15 creditors pursuing claims arising from expropriations and sovereign defaults, following litigation first brought by Canadian miner Crystallex in 2017. The transaction remains subject to approval by the US Treasury’s Office of Foreign Assets Control (“OFAC”) and ongoing appeals.

For multinational investors, the case illustrates the growing importance of jurisdiction. Although CITGO is ultimately owned by Venezuela’s state oil company, Petróleos de Venezuela (“PDVSA”), its assets sit within the US legal system, exposing them to creditor enforcement while also benefiting from the protections of American courts.

According to regional political risk and energy analyst José Chalhoub, this is precisely why the dispute matters beyond Venezuela. “The CITGO case has important implications for foreign investors because it shows how assets protected under US law may be insulated from Venezuelan political risk,” Chalhoub explained. “In the current Venezuelan context, where the US is pushing for reforms to key laws, the objective appears to be strengthening protections for assets and investments and preventing a new wave of expropriations.”

“THE CITGO CASE HAS IMPORTANT IMPLICATIONS FOR FOREIGN INVESTORS BECAUSE IT SHOWS HOW ASSETS PROTECTED UNDER US LAW MAY BE INSULATED FROM VENEZUELAN POLITICAL RISK.”

José Chalhoub, political risk and energy analyst, Venezuela

CITGO remains one of the largest refiners in the United States, with approximately 829,000 barrels per day of refining capacity across an integrated network of refineries, pipelines and terminals. That scale explains why the sale has become more than a creditor recovery exercise. It is also a test of how strategic infrastructure is treated when sovereign debt, sanctions and geopolitics collide.

The dispute is rooted in Venezuela’s prolonged debt crisis. The Delaware process seeks to satisfy nearly USD 19 billion in recognised creditor claims arising from defaults and expropriations. Amber Energy’s successful bid also includes a USD 2.1 billion payment to holders of defaulted PDVSA 2020 bonds secured against CITGO equity. Together, these claims represent one of the largest attempts to recover value from Venezuelan state-owned assets abroad.

Since OFAC sanctioned PDVSA in 2019, Venezuela’s state oil company has been heavily constrained in its access to the US financial system. At the same time, the country continues to carry an estimated USD 150 billion or more in external liabilities. Yet capital has not disappeared entirely. Venezuela still attracted approximately USD 1.6 billion in foreign direct investment (“FDI”) in 2024, while the total stock of foreign investment in the country stood at around USD 30.5 billion. For investors, the issue is no longer simply whether Venezuela offers opportunity, but whether legal certainty, property rights and institutional stability can be trusted to protect it.

While CITGO is an exceptional case, it reflects a broader shift in the global investment environment. Strategic assets are increasingly being drawn into foreign policy, sanctions enforcement and creditor recovery, making legal jurisdiction and ownership structure as important as the asset itself.

According to Chalhoub, CITGO has become the focal point of competing geopolitical interests. “CITGO could well be a special case under fire, caught in a clash between the Venezuelan governments of Chávez, Maduro and Delcy Rodríguez; the opposition, led first by Juan Guaidó and the so-called ad hoc board of CITGO; and the United States, due to the strategic nature of the business controlled by the company on US soil.”

“CITGO COULD WELL BE A SPECIAL CASE UNDER FIRE, CAUGHT IN A CLASH BETWEEN THE VENEZUELAN GOVERNMENTS OF CHÁVEZ, MADURO AND DELCY RODRÍGUEZ.”

José Chalhoub, political risk and energy analyst, Venezuela

The picture is further complicated by Russia’s historic interests, which arose through debt collateral pledged by PDVSA. Chalhoub added, “This is a unique case that highlights the strategic importance of an asset owned by one country but located on another country’s soil.”

“The decisive issue is whether CITGO will ultimately be returned to PDVSA and the Venezuelan authorities, represented by Delcy Rodríguez, once the Trump administration ends,” Chalhoub concluded. “That question will largely determine the company’s future.”

However the dispute is resolved, its significance will extend far beyond Venezuela. The CITGO case demonstrates that in an era of sanctions, sovereign defaults and geopolitical competition, competitive advantage depends not only on where companies invest, but under which legal systems their assets are protected.