Amber Energy Plans to Hold on to Citgo Refineries After Takeover

Sale, expected to close in 2026, needs OFAC approval
Citgo’s refineries provide stable earnings throughout the year
Amber expected to shake up Citgo’s board
Some contractors might become permanent employees after deal

HOUSTON, Dec 1 (Reuters) – Elliott Investment Management’s affiliate Amber Energy plans to keep Citgo Petroleum’s refineries, terminals and other connected assets once it takes over the Venezuela-owned U.S. refiner, following the completion of a court-ordered auction, sources close to the preparations said.

Get the Latest US Focused Energy News Delivered to You! It’s FREE:

A Delaware court last week approved Amber’s $5.9 billion bid for Citgo’s parent PDV Holding and ordered the sale of PDV’s shares, wrapping up an auction aimed at compensating creditors for debt defaults and expropriations in Venezuela.

The competition heated up in the final stages, with Amber and rival Gold Reserve (GRZ.V) raising their offers, while new bidders emerged with last-minute proposals.

The sale needs approval from the U.S. Treasury’s Office of Foreign Assets Control. Citgo and its Venezuelan-owned parent companies are appealing the auction results and the sale order, which means there is still a level of uncertainty to the takeover.

Considered the crown jewel of Venezuela’s foreign assets, Citgo’s 829,000 barrel-per-day refining network is a sophisticated operation supported by 43 terminals and 4,000 independently owned retail outlets across the U.S. The Houston-based company, which is the seventh largest U.S. refiner, employs some 3,300 workers.

“They are assuming they are going to be owning this thing for a very long time and just operating it well, running it efficiently, and getting returns through cash-flow-generating business,” one of the sources familiar with Amber’s plans said.

Citgo’s three refineries in Texas, Louisiana and Illinois take advantage of their geographical diversity with seasonal output throughout the year that provides stable earnings, the sources said. “They see value in all that working together,” the person added, referring to the plants, terminals and Citgo-branded retail outlets.

In that aspect, Citgo’s assets are different from Phillips 66’s portfolio, which Elliott has put under the magnifying glass after growing its minority stake there to $2.5 billion as part of its effort to make sure the company does not lose focus on refining.

Elliott and Citgo did not reply to requests for comment. Citgo and its parent companies on Monday filed an appeal to the Delaware judge’s sale order.

NEXT YEAR COMPLETION

In a release last week, Amber said it expected the sale transaction to close next year, pending regulatory approvals and the satisfaction of other conditions. Upon closing, the company will continue to operate as Citgo, it added.

Once the sale is completed, Amber’s leadership, led by refining experts Greg Goff and Jeff Stevens, is expected to shake up Citgo’s board to remove some top executives before introducing cost-cutting measures to boost profits, the sources said.

Amber would like some board members to stay on and foresees a plan to turn some contractors into permanent workers, according to one of the sources.

Following an analysis of information available in a court-ordered Citgo data room, some Elliott and Amber executives have identified what they called Citgo’s “poor performance” during a relatively healthy time in the industry, the sources said.

Experts and creditors warned the Delaware court in hearings since September that Citgo missed earnings projections set by its current management.

Citgo’s profit plummeted to $305 million last year from $2 billion in 2023 due to weaker refining margins that resulted in two quarterly losses in 2024 and 2025. But the company returned to profit in the second quarter this year, and its liquidity rose to $2.75 billion at the end of the third quarter.

For Amber, there has been an “erosion of asset value” during the long-standing sale process, along with deteriorated operations and the loss of talented employees. Citgo was valued by court advisors at about $13 billion, but Venezuela, which opposes the auction, has said it is worth up to $18 billion.

“Citgo has terrific people and high-quality assets,” the source said. “Just getting it out of limbo should allow the enterprise to thrive.”

Amber is optimistic about Citgo’s accumulation of cash flow due to its inability to repatriate dividends to Venezuela and recent upgrades and maintenance work to the refineries, the sources said.

Reporting by Marianna Parraga; Editing by Nathan Crooks and David Gregorio