Years ago, I thought a Citgo sale to Petrobras would be a great fit, possibly as a JV with China… Chavez would get needed billions; Petrobras (Lula and Chavez got along) would establish a presence in the US with some excellent assets and China would participate without the need to change the sign at Fenway Park… But it’s complicated as Bloomberg points out here:
“Like the country, PDVSA, as the state-run oil giant is known, is strapped for cash. So it’s asking bondholders to swap soon-to-mature notes for longer-term securities backed by a 50.1 percent stake in its best-performing asset, Citgo. PDVSA has estimated its value at $8.3 billion, a sum scoffed at by analysts who reckon the number’s likely well less than half that.”
“After attracting “substantially less” than 50% of the bondholders’ assent on Thursday, PDVSA extended the preliminary deadline by six days to Oct. 12. Nothing about Citgo makes it easy to decide whether accepting would make sense. For one thing, the refiner’s ultimate fate could be clouded by billions in outstanding claims against Venezuela by Exxon Mobil Corp. and other foreign companies seeking compensation for asset seizures going back a decade.”
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