The United States has extended the ban on a bond issued by the Venezuelan oil company PDVSA until July 2021

File photo of a PDVSA oil facility in Lagunillas (REUTERS / Isaac Urrutia)
File photo of a PDVSA oil facility in Lagunillas (REUTERS / Isaac Urrutia)

The U.S. Treasury Department extended Wednesday through July 2021 the license prohibiting the transactions of the Petróleos de Venezuela SA PDVSA-2020 bond – 8.5%, thus protecting the shares of its US subsidiary CITGO.

The 5F general license was announced by the Treasury’s Office of Foreign Assets Control (OFAC) (headed by Secretary Steven Mnuchin) and in the context of the sanctions regime for the Venezuelan dictatorship, which the PDVSA controls. It bears the signature of Vice President Bradley T. Smith and took effect Wednesday.

It replaces the previous 5E General License published on October 6, which banned all transactions around the PDVSA-2020 bond – 8.5% until January 19, 2021. The new license extends the ban until July 21, 2021.

The measure is aimed at prevent the bondholders, who defaulted in 2019, from enforcing the guarantee that the majority shareholder of CITGO would give them, PDVSA’s US subsidiary that served as collateral for the instruments of the Venezuelan state oil company.

United States Treasury Secretary, Steven Mnuchin (EFE / EPA / AL DRAGO / File)
United States Treasury Secretary, Steven Mnuchin (EFE / EPA / AL DRAGO / File)

This protection against CITGO, a company controlled by the Venezuelan opposition leader Juan Guaidó, recognized by the United States as the interim president of Venezuela, it has been extended several times.

In October 2019, the interest payment on Petróleos de Venezuela (PDVSA) 2020 bond was due at $ 913 million. Since the Venezuelan government did not comply with its obligations, the holders were entitled to acquire 51% of the shares of CITGO, which constitute the guarantee for the issue.

Control over this company is in the middle of the battle between the ruling party and the opposition: While the United States authorities recognize the ad hoc board of directors appointed by the National Assembly and Guaidó, Nicolás Maduro’s regime accuses opponents of usurping state property.

Venezuelan dictator Nicolás Maduro and interim president Juan Guaidó
Venezuelan dictator Nicolás Maduro and interim president Juan Guaidó

Despite the restrictions imposed by the US sanctions on Venezuela, the holders of the 2020 PDVSA bondincluding the Russian state-owned company Rosneft, can enforce the guarantee thanks to this license granted by the Ministry of Finance.

To avoid this, President Donald Trump’s administration has issued consecutive extensions since October 2019.

CITGO, located in Houston, Texas, It has three refineries in the United States that collectively process about 750,000 barrels of Venezuelan crude oil per day. as well as a network of some 10,000 petrol stations across the country.

In January 2019, days after Guaidó proclaimed himself Venezuelan president and received recognition from Washington, Washington imposed sanctions on the PDVSA, including blocking CITGO funds with the aim of eventually turning them over to the opposition leader’s team.

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