US president Donald Trump's administration plans to protect future Venezuelan oil export revenue from seizure by US-based creditors, which hold billions of dollars in claims against Caracas and state-owned PdV. US actions have introduced a new twist in the years-long saga to auction off PdV-owned refiner Citgo as part of a court-mandated sale.
An executive order Trump signed on 9 January extends a prohibition on seizing US-based Venezuelan property to the proceeds from sales of Venezuelan crude and other energy commodities. The US administration has said it plans to market Venezuelan energy commodities on behalf of Caracas with proceeds held in bank accounts controlled by the US treasury. US-facilitated sales of Venezuelan crude cargoes had netted $500mn as of 14 January, with additional sales "expected in the coming days and weeks", a US official said.
Venezuelan crude cargoes sold under US-facilitated transactions are commanding higher prices than before the forced removal of the country's president, Nicolas Maduro, two weeks ago, US energy secretary Chris Wright says. Trump earlier this month made Wright responsible for managing the sale of 30mn-50mn bl of floating and onshore Venezuelan crude. Venezuelan interim president Delcy Rodriguez, whom Trump on 14 January described as a "terrific person" for her co-operation with US demands, would potentially be able to draw on at least some of those proceeds. But the US administration has not explained how it will disperse the funds.
Washington since 2019 has blocked Venezuelan funds in the US, including its central bank reserves, nominally to deny access to Maduro. But this has also frustrated US oil producers, bondholders, mining firms and other companies, which have advanced claims against Caracas worth more than $25bn. The most advanced legal cases brought forward by creditors has resulted in a decision by the US District Court for the District of Delaware to sell Citgo for $5.9bn.
ConocoPhillips has registered three claims totalling almost $12bn and could see some of them satisfied if Citgo is sold. But a US appeals court, which expects to take up a possible appeal against the Delaware decision and 22 other legal cases brought forward against Caracas, has asked the Trump administration whether the government change in Venezuela could influence the appeals process. The administration has yet to respond.
Sympathy for expropriators
Trump last year justified the US military build-up that culminated in Maduro's capture on 3 January by citing the need to restore the property of US companies that Venezuela had expropriated. But the Trump administration has asserted authority over Caracas following Maduro's ouster, and Trump now shows far less willingness to help US firms seek restitution. "We're not going to look at what people lost in the past, because that was their fault," Trump told ConocoPhillips chief executive Ryan Lance during a meeting with oil company chiefs at the White House on 9 January. Trump advised Lance to "write off" the $12bn expropriation claim, suggesting that "you'll make it back, one way or another".
The possibility of future losses is a factor holding back large US firms, despite Trump's lobbying for them to resume business in Venezuela. "We've had our assets seized there twice," ExxonMobil chief executive Darren Woods told Trump on 9 January. "And so you can imagine to re-enter a third time would require some pretty significant changes from what we've historically seen here and what is currently the state." Trump two days later complained that ExxonMobil was "playing too cute".
