HOUSTON (Reuters) – ConocoPhillips (NYSE:) has filed a request with the court to preserve the U.S. oil producer’s near-top priority among Citgo Petroleum’s creditors, collecting proceeds from an auction of shares in the company’s parent company. Venezuelan company.
Citgo is the sole asset of PDV Holding, which has been found liable for Venezuela’s foreign debts by a US court in Delaware.
Conoco’s filing with the court follows lawsuits in Texas and New York by holders of Venezuelan bonds and notes seeking to bridge the queue of creditors. Eighteen creditors are seeking to recover as much as $21.3 billion from the auction planned to pay for Venezuela’s expropriations and debt defaults.
The auction is expected to be completed in the coming months.
“This action seeks to obtain attachments against the shares of Citgo Holding in favor of each additional creditor in the order of priority previously determined by the court,” Conoco said in its motion filed this week.
A Conoco spokesperson declined to comment.
Citgo cut ties with its ultimate parent, Caracas-based state-owned PDVSA, in 2019, but they have U.S. subsidiaries including Citgo Holding and PDV Holding.
A conditional offer of up to $7.3 billion selected by a court official last month would cover only a small portion of the claims if approved by the judge.
Conoco has three separate arbitration claims approved by Delaware to be offset from the auction proceeds. One of the claims, valued at $1.33 billion, is third in the priority order.
Conoco has also moved in recent months to seize payments to Venezuela from an offshore project being developed by PDVSA, Shell (LON:) and the National Gas Company of Trinidad and Tobago.
Conoco recently received a permit from the U.S. Treasury Department to demand the payments, Bloomberg reported earlier this month. Conoco and the Ministry of Finance have not confirmed the approval.
“The risk that the…defendants would attempt to seize Citgo Holding’s shares based on an alter ego theory is real,” Conoco added in its motion.
“These parties have initiated actions to establish that PDV Holding is the alter ego of PDVSA or the Republic, in an attempt to thwart this court’s property distribution.”
