Venezuela could lose more US assets after arbitration award to gold mining firm whose assets were taken by the Chavez government

Fuel Fix:

A payment on a $1.4 billion arbitration award to a Canadian gold mining company is allowing Venezuela to keep ownership of Citgo Petroleum’s three U.S. refineries — at least through January.

The Venezuelan government recently paid Toronto-based Crystallex International Corp. $425 million as part of a settlement to resolve a legal dispute over gold mines seized by the South American nation’s late President Hugo Chavez in November 2008. Under the terms of the agreement, Venezuela has until 2021 to pay the nearly $1 billion balance, but Jan. 10 looms as a critical deadline for the Venezuela government to issue Crystallex a promissory note, post collateral and set up installment dates.

In a statement, Crystallex CEO Bob Fung said the company is prepared to take additional legal action to seize Citgo shares if Venezuela does not comply. “If that process moves forward, the shares would be sold at auction under the auspices of the U.S. Marshals Service in order to satisfy the remainder of Crystallex’s award,” he said.

Citgo did not immediately comment.

Crystallex won an award from an international arbitration panel following the seizure of its Venezuelan assets and turned to federal court in Delaware to enforce the award. The U.S. court ruled in August that Crystallex could seize the shares of Citgo, the U.S. subsidiary of the Venezuelan national oil company, PDVSA, to satisfy the judgment.

The ruling was significant because Venezuela and PDVSA owe billions of dollars to creditors, including other foreign companies whose assets were seized by the government, and it opened the door for them to also target Citgo, one of Venezuela’s most valuable and accessible foreign assets. Several analysts have pegged Citgo’s value between roughly $4 billion and $8 billion, excluding debt, and many expect the refiner to eventually end up in other hands.

Among the companies seeking compensation from Venezuela is the Houston oil company Conoco Phillips, which recently reached a $2 billion settlement with PDVSA for the 2007 seizure of two of its joint ventures. The company is also seeking compensation from the government of Venezuela through arbitration. The award, expected to be determined this year, could be as high as $4.5 billion, analysts said, a tall order for a cash-strapped government.
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The socialist have to eventually pay for their taking of assets of others.  What Venezuela should do is try to return the assets from those they took them from so that they could be properly managed.  But socialists just are not that smart when it comes to business.  The country was far richer before it started taking other people's property.