A special master for a federal court in Delaware has named Amber Energy Inc. as its court-approved bidder for CITGO, one of the largest refiners and distributors of petroleum products in the U.S.
The winning bid, announced late Friday, places a $7.28 billion enterprise value on Houston-headquartered CITGO, whose assets include 3,600 employees, refineries in Corpus Christi, Tex., Lake Charles, La. and Lemont, Ill., along with 42 terminals, three lubricant blending plants, eight pipelines and a 4,300 customer base of CITGO-branded gas stations and convenience stores. The acquisition is expected to close in mid-2025.
It also ends an evolving eight-year court battle by creditors over claims against owners of the the 114-year-old energy company, Venezuela’s state-controlled Petróleos de Venezuela S.A. (“PDVSA”).
Amber Energy Inc. is a newly created energy company backed by Elliott Investment Management, along with a plethora of U.S. investors. The company is headed by CEO Gregory Goff, former CEO of Andeavor after 30 years with ConocoPhillips. Its president is Jeff Stevens, former president of the Permian Basin E&P company Franklin Mountain Energy.
Barclays is acting as lead financial advisor to Amber Energy, along with Citi and Perella Weinberg Partners. Akin Gump Strauss Hauer & Feld and Latham & Watkins are acting as Amber Energy’s outside legal counsel.
CITGO, formerly known as Cities Service Co., was acquired in 1982 by Occidental Petroleum, but sold the next year to Southland Corp., the then-parent company of 7-Eleven. In 1986, PDVSA acquired a 50 percent interest in CITGO from Southland, and the rest of the company four years later.
In January 2019, after years of political and economic upheaval in Venezuela under the successive presidencies of Hugo Chavez and Nicolás Maduro, the U.S. government imposed sanctions on PDVSA, freezing its assets in the U.S., including CITGO.
In response, CITGO cut operational ties with PDVSA. The company continued to operate under a special licensing agreement with the U.S. Treasury Dept. and was able to finance its operations through loans arranged and approved by federal regulators, who continued to protect the company from its creditors, including those outside Venezuela.
By October 2023, protections from creditors had run their course in federal court, according to Reuters. By June of this year 18 creditors, spearheaded by a legal action filed in 2016 by the Canadian mining concern Crystallex, were seeking claims of $21.3 billion from CITGO assets, including bondholders from a $1.9 billion government approved post-sanctions refinancing of the company in 2020 backed by a 50.1 percent equity stake.