Citgo Petroleum, the U.S. refining arm owned by Venezuela, reported second-quarter net earnings of $100 million, rebounding from a $25 million loss in the same period a year earlier. The Houston-based company ended the quarter with $2.6 billion in liquidity, according to its statement on Thursday.
The refiner, controlled by parent company PDV Holding, is currently the subject of a U.S. court-ordered auction intended to compensate creditors over Venezuela’s historic debt defaults and asset seizures. Citgo had posted losses in the previous two quarters as a result of weaker refining margins before returning to profitability in the latest period.
A U.S. court in early July officially recommended awarding a $7.38-billion winning bid to mining firm Gold Reserve and investor group Dalinar Energy for PDV Holding, the parent company of Citgo Petroleum. The bid, which is substantially above the $3.7-billion “floor price” approved in April, would mark the largest attempted takeover of a U.S.-based refining asset by creditors in decades.
However, Gold Reserve’s position has been shaken since then by a higher, $8.82-billion bid from an Elliott Investment Management affiliate and a contested proposal from Amber Energy, disclosed by Red Tree Investments. Amber’s offer, lower than Gold Reserve’s, has drawn objections for allegedly breaching auction procedures. The challenges to competing bids have introduced new uncertainty into the Delaware court-supervised sale, potentially upending Gold Reserve’s standing and reshaping the race for control of Citgo, Bloomberg reported.
On Thursday morning, Reuters reported that the court-appointed Special Master in charge of the U.S. auction of PDV Holding requested that the final sale hearing be delayed. The move follows new interest from potential bidders and is intended to give more time to evaluate all qualifying offers before a winner is selected to help settle multi-billion-dollar creditor claims against Venezuela.
By Charles Kennedy for Oilprice.com
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