U.S. Renews Measure Protecting Citgo From Venezuelan Debt Holders

The U.S. Treasury Department's Office of Foreign Assets Control (OFAC) has extended a protective measure for the Venezuelan state-owned oil company Citgo. The administrative measure, renewed until September 17, 2026, prevents holders of Venezuelan debt bonds from seizing the 50.1% stake in Citgo that serves as collateral. This action effectively shields Citgo, one of the largest refiners in the United States and a key foreign asset for Venezuela, from creditors seeking to claim it as payment for other debts. The Maduro government issued the specific bonds in question in October 2016, with a 2020 maturity date and a significantly above-market interest rate, using Citgo shares as an "unthinkable" guarantee. Since their maturity, U.S. government actions have repeatedly blocked creditors from executing this guarantee. The renewed license, General License No. 5Y, replaces General License No. 5X and continues to authorize certain transactions related to the 8.5% Petróleos de Venezuela, S.A. 2020 bond, while prohibiting actions that would otherwise be forbidden under executive orders aimed at Venezuela.