Exclusive-Conoco emerges as surprise bidder in historic Citgo stock auction

By Mariana Parraga and Gary McWilliams

HOUSTON (Reuters) – A U.S. court auction evaluating the fate of Venezuelan-owned oil refiner Citgo Petroleum has received bids using claims in lieu of cash to default on Venezuelan debts, according to people familiar with the process and the documents. Part of a historic case to settle.

Oil producer ConocoPhillips, the largest creditor in the case after courting the court about $12 billion from asset acquisitions in Venezuela, submitted a credit bid last month using its claims, the people said. A spokesman declined to comment.

A Delaware court official overseeing the auction has said other bidders have also tried to enforce their claims against Venezuela in the bids, leaving less cash to distribute among remaining creditors. The court has not disclosed details of the bidding round containing proposals received till January 22.

The credit bids raise the prospect of insufficient cash to settle claims totaling $21 billion accepted by the court, leaving some creditors feeling they could be denied payments.

The claims stem from Venezuela’s seizure and debt default since it nationalized energy and mining companies more than a decade ago. Citgo became embroiled in the case after a court, in an extraordinary ruling, found its parent company PDV Holding liable for the South American country’s debt.

Conoco exited oil refining 12 years ago when it spun off Phillips 66. It was unclear whether the credit bid was made with another company or was intended to secure Citgo assets that could be broken up.

In addition to Conoco, energy companies Chevron, Reliance Industries, Koch Industries and Valero Energy and at least one activist investor have expressed interest in the sale process, the people said. Dozens of bidders began due diligence, sought…

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