A company connected to hedge fund Elliott Management, known as Amber Energy, has positioned itself as the leading bidder for Citgo, the U.S.-based subsidiary of Venezuela’s state-owned oil company, PDVSA. The bidding process has been contentious, with Amber Energy submitting a revised offer that surpasses the previous leading bid from a consortium led by Gold Reserve.
According to court documents, Amber Energy’s bid totals $8.72 billion, which includes $5.86 billion aimed at creditors of PDV Holding and an additional $2.86 billion to settle claims related to a bond default by PDVSA. This unsolicited bid was presented earlier this month, shifting the dynamics of the ongoing acquisition process.
The Gold Reserve consortium’s earlier offer amounted to $7.4 billion, a figure endorsed by court officer Robert Pincus as the “best and highest” prior to Amber Energy’s entry. This endorsement significantly exceeded the court’s established floor price of $3.7 billion. If finalized, this acquisition would represent a significant moment in U.S. financial history, marking one of the largest creditor seizures of a refining asset.
Implications for Citgo and its Creditors
Citgo operates three refineries in the United States, with a combined processing capacity of 770,000 barrels per day located in Louisiana, Texas, and Illinois. As a crucial player in the U.S. fuel market, Citgo’s future remains uncertain, particularly as its management continues to resist takeover efforts. The emergence of a competing bidder like Amber Energy may complicate the court’s final decision and could potentially drive the final acquisition price even higher.
The ongoing bidding war is also tied to the financial recovery efforts for creditors seeking to reclaim losses stemming from Venezuela’s nationalization policies initiated under Hugo Chavez and subsequent debt defaults that have accumulated since 2017. In total, these creditors are pursuing claims that amount to $19 billion, highlighting the significant financial stakes involved in this process.
With the bidding now open for further proposals, the pressure is mounting on Gold Reserve and other potential bidders to respond to Amber Energy’s substantial offer. The next steps in this high-stakes bidding process will be closely monitored by stakeholders across the energy sector and beyond, as the outcome could reshape the landscape for refining assets in the United States.
