Venezuelan opposition urges U.S. to stop auction of Citgo, the country's largest foreign asset

Venezuela's opposition is intensifying its lobbying efforts in Washington to persuade the Biden administration to intervene in the court-ordered sale of Citgo Petroleum Corp.'s parent company in the country.

The fear is that, if executed, the sale could be used by the Maduro regime to blame the opposition for what would be a crucial loss ahead of the upcoming presidential elections, set for July 28.

The effort seeks to prevent the sale of Citgo's parent company, PDV Holding, which has been targeted by numerous creditors to settle over $20 billion in claims against the Caribbean country. The sale process, initiated by a Canadian mining company after its assets were expropriated by late Venezuelan President Hugo Chavez, is overseen by District Judge Leonard Stark in Delaware. The final round of bids is set to take place next week.

The opposition-appointed ad-hoc board, representing state oil company Petróleos de Venezuela SA (PDVSA) in US courts, is seeking congressional support to protect the asset from creditors.

A letter sent Wednesday to Treasury Secretary Janet Yellen and Attorney General Merrick Garland, signed by a bipartisan group of lawmakers, also urges the administration to halt the sale process using its economic powers, revoke the favorable sanctions licensing policy announced in May 2023, and establish an alternative process for resolving claims against Venezuela and PDVSA.

The letter was co-authored by Representatives Debbie Wasserman Schultz and Maria Elvira Salazar, a Florida Democrat and Republican, respectively. Other signatories include Democratic Representatives Joaquin Castro, Jared Moskowitz, Darren Soto, and Susan Wild, as well as Senator Robert Menendez. Republican Representatives Carlos Gimenez and Michael Waltz also signed the letter.

The congressional letter signatories echoes the opposition's concerns about the potential impact of the Citgo sale on Venezuela's democratic transition. They also argued that protecting the asset aligns with US regional security interests.

Other actors have been quick to express their concern about what the auction could do for Venezuela's democracy as of late. Former White House special envoy for Venezuela affairs Elliot Abrams criticized the timing of the sale in a recent blog post, calling it " "unbelievably stupid" and a "gift to Maduro":

This is a likely bonanza for Maduro. CITGO's board has since 2019 been out of his control and under that of Venezuela's opposition, dating from the days when the U.S. government recognized National Assembly speaker Juan Guaido as Venezuela's interim president. CITGO's board was chosen by the opposition-led National Assembly back then. Maduro will obviously blame the opposition for the loss of CITGO, which is (as the Houston Chronicle put it) "Venezuela's foreign crown jewel" and is its most valuable foreign asset.

Citgo is Venezuela's most significant foreign asset, with its shares scheduled for auction by July 15. The company has plants in Louisiana, Illinois and Texas that can jointly process 807,000 barrels per day of oil. In the last two years alone the company has generated $4.8 billion in combined net earnings.