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US NEWS 
- Rodriguez’s government has replaced law firms representing Venezuela
- Citgo’s board of directors expected to remain
- Refiner earned $936-million profit in Q2
HOUSTON, Sept 9 (Reuters) – The Venezuelan opposition-controlled boards that have supervised U.S.-based refiner Citgo Petroleum for the last seven years are preparing to wind down as soon as this month, following a shake-up by Venezuelan interim President Delcy Rodriguez, two sources involved in the preparations said.
Rodriguez began preparations earlier this year to retake control of the Venezuela-owned refiner after her government, which replaced Nicolas Maduro’s administration after he was captured by U.S. forces in January, was formally recognized by Washington.
The interim president’s administration has since replaced law firms that had represented Venezuela and state-run oil company PDVSA in lawsuits and arbitration cases abroad and were hired by an opposition-led National Assembly, according to U.S. court filings.
“The boards are no longer recognized as valid by all political and legal counterparties, so they can no longer continue,” one of the sources said. “This is happening, unfortunately, without any previous discussion.”
Venezuela’s oil ministry, PDVSA, Citgo and the supervising boards did not immediately reply to requests for comment.
Following U.S. imposition of sanctions on Venezuela’s energy sector in 2019, Houston-based Citgo severed ties with its parent, Caracas-headquartered PDVSA, under orders from a National Assembly that the opposition then controlled.
Even after the Venezuelan opposition lost control of the assembly, the opposition-led boards abroad continued supervising the refiner and were involved in appointing its board of directors.
STATUS OF CITGO AUCTION LOOMS
A U.S. court-organized auction in which a judge approved a bid for Citgo’s holding company from an affiliate of hedge fund Elliott Investment Management to pay creditors pursuing the refiner remains unexecuted. The sale awaits final approval from the U.S. Treasury Department, which has protected Citgo from creditors in recent years.
In early August, Treasury extended that protection through a license until September 17. A U.S. court of appeals considering challenges to the auction process has set an October hearing, after which the court could rule on the refiner’s ownership.
Rodriguez’s administration has labeled the court-ordered sale as “theft” of a sovereign asset, but it is unclear what the administration’s next move might be as it works with Washington to revive the OPEC country’s oil sector.
In the meantime, no imminent changes are expected to Citgo’s board of directors and to the company’s executive team, led by CEO Carlos Jorda, the sources said.
Under the Venezuelan opposition’s oversight, Citgo has remained profitable. Citgo recently regained access to Venezuelan crude for refining and registered net income of $936 million in the second quarter, up from $100 million in the same period last year amid solid margins.
Reporting by Marianna Parraga; Editing by Julia Symmes Cobb, Nathan Crooks, Rod Nickel
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