Gold Reserve's $7.4 billion offer chosen as provisional victor in the auction for Venezuela's CITGO assets.
The ongoing auction of Venezuela's US-based refiner CITGO, a court-mandated sale of shares belonging to PDV Holding (PDVH), has reached a significant milestone. A Delaware court official, Special Master Robert Pincus, has recommended a final offer from Canadian miner Gold Reserve, submitted through its subsidiary Dalinar Energy Corporation, as the preliminary winner.
The $7.38 billion bid from Gold Reserve could mark the conclusion of a years-long court-mandated sale process to satisfy creditor claims against Venezuela. The bid is expected to satisfy 11 of the 15 claims accepted by the court, including major creditors such as Crystallex, Tidewater, ConocoPhillips, and O-I Glass.
The auction was initiated by Delaware Judge Leonard Stark in late 2022 to address approximately $20.6 billion in liabilities linked to Venezuela's nationalized assets. The auction process has been marred by delays and controversy since 2017.
The Gold Reserve bid combines equity and debt financing, with lenders including JP Morgan and TD Bank. Notably, the auction saw other high bids from consortia led by private equity firm Black Lion and trading giant Vitol, with offers of $8 and $10 billion, respectively.
However, the sale awaits final judicial review, creditor objections, and U.S. Treasury approval. Venezuela’s government and opposition have expressed differing views on the sale. The opposition, which has overseen CITGO’s boards since 2019, aims to retain the refiner, while the Maduro government deems the auction a theft of a sovereign asset.
Gold Reserve has been involved in international arbitration processes against Venezuela over the withdrawal of mining rights from the Siembra Minera joint venture in the Orinoco Mining Arc and the revocation of its Brisas and Unicornio mining concessions by the former Hugo Chávez government in 2008.
CITGO's portfolio includes a pipeline network and over 4,000 service stations, mostly on the US East Coast. The refiner owns refineries in Illinois, Louisiana, and Texas with a total processing capacity of 769,000 barrels per day (bpd).
As the preliminary winner, Gold Reserve Executive Vice Chairman Paul Rivett has thanked Pincus for his efforts and sees the recommendation as an "acknowledgment of the bid's strength." The final sale hearing is scheduled for August 18, 2025. The U.S. Treasury Department still needs to approve the final winner of the auction, adding another layer of uncertainty.
The $7.38 billion bid from Gold Reserve, if approved, could see the conclusion of a years-long business process in the finance industry, as the creditors' claims against Venezuela are addressed through investing in CITGO's assets. The recommended bid, which involves equity and debt financing by lenders such as JP Morgan and TD Bank, competes with high bids from consortia in the business sector, including Black Lion and Vitol. However, the final decision on the sale still depends on the U.S. Treasury approval, adding a layer of uncertainty to the potential change in industry ownership.
