The administration of US President Donald Trump on Thursday temporarily shielded Venezuela’s opposition coalition led by Juan Guaido from losing the country’s prized US-based Citgo refineries.
The opposition is banking on profits from its Houston-based company to fund the crisis-torn nation’s recovery — if it is able to force Venezuelan President Nicolas Maduro from power.
The US Department of the Treasury issued an order giving Guaido’s team three months to “restructure or refinance payments,” by suspending the terms of some financial sanctions that were originally intended to pressure Maduro from office.
A likely failure to make a US$913 million debt payment due on Monday could have triggered foreclosure.
Guaido said that US officials are helping to protect Venezuelan assets that Maduro’s government exploited at the people’s expense.
“For years, the regime indebted the nation, mortgaging the future of Venezuelans who today suffer from a complex humanitarian emergency,” he said on Twitter. “We are managing to maintain assets that the regime had looted.”
Citgo in a statement said it was “gratified” by the department’s decision.
Venezuela has owned Citgo since the 1980s as part of the state-run oil company PDVSA. It has three refineries in Louisiana, Texas and Illinois in addition to a network of pipelines crisscrossing 23 states. It provides between 5 and 10 percent of US gasoline.
Guaido claimed presidential powers in January as head of the opposition-led National Assembly, vowing to end Maduro’s rule and two decades of socialist leadership as the nation struggles in political and economic crisis.
After the Trump administration recognized Guaido as Venezuela’s legitimate leader, US courts granted approval to a board appointed by the opposition to take control of Citgo, valued at an estimated US$8 billion.
In 2016, Maduro’s government made a deal with some bondholders of PDVSA, agreeing to swap their bonds for new ones maturing next year.
Maduro gave the creditors 50.1 percent of Citgo as collateral, despite objections from the National Assembly, which said that the deal was illegally carried out without its approval.
Maduro accuses the opposition of illegally getting control of Citgo, saying it is part of the “imperialist” US’ attempt to install Guaido as a “puppet” government.
Russ Dallen, a broker at Miami-based Caracas Capital Markets, said that in a post-Maduro world, Citgo would be a significant source of income to rebuild Venezuela by refining and selling crude from the country’s vast reserves.
“Citgo is their sure thing,” Dallen said. “It is guaranteed fast cash whenever you need it. Citgo can turn around and sell that oil or refine it.”
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