A U.S. court officer on Wednesday 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, Reuters reported. The move positions Dalinar as the lead contender to seize control of one of the largest independent refiners in the U.S., capping a high-stakes auction that has drawn scrutiny across the board.
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.
Citgo, with refining capacity of around 770,000 barrels per day and major assets in Louisiana, Texas, and Illinois, remains strategically vital to U.S. Gulf Coast fuel markets. Any change in ownership could have wide-reaching implications for supply chains, crude purchasing patterns, and offtake agreements, particularly as Venezuelan crude remains largely off-limits due to U.S. sanctions.
The court-appointed special master recommended the Dalinar-Gold Reserve consortium as the “best and highest” bidder, and dismissed rival claims that the process had been rigged or incomplete. The ruling brings the auction closer to conclusion after months of legal maneuvering and lobbying by both Venezuelan opposition figures and bondholders eager to claw back funds from Caracas-linked assets.
Earlier this year, a U.S. judge greenlit the auction’s structure, including the minimum $3.7-billion bid requirement, setting the stage for today’s announcement. The court’s final approval could come later this month.
While Citgo’s current management has vowed to fight any change in control, creditors are inching closer to breaking the firewall around one of Venezuela’s last profitable energy-linked holdings in the West.
By Charles Kennedy for Oilprice.com
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