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ConocoPhillips asks to probe possible secret Citgo sale

By , Bloomberg News
Refiners say any decision to revise U.S. policy banning most oil imports should include discussion of the Jones Act, which sets rules for cargo transports between U.S. ports. Photographer: Eddie Seal/Bloomberg
Refiners say any decision to revise U.S. policy banning most oil imports should include discussion of the Jones Act, which sets rules for cargo transports between U.S. ports. Photographer: Eddie Seal/BloombergEddie Seal

ConocoPhillips asked a Texas judge to let it investigate claims Venezuela's state-owned oil company is secretly liquidating U.S. assets to avoid paying a potential multibillion-dollar arbitration award over the nationalization of Conoco-Phillips' assets in 2007.

Petroleos de Venezuela's principal U.S. asset is Houston-based Citgo Petroleum Corp., which owns three refineries and a distribution network.

"The available evidence indicates that PDVSA is liquidating its interests in Citgo to remove the proceeds from the United States to Venezuela or elsewhere with the specific intent to hinder, delay or defraud its creditors," including the company's "ability to collect on anticipated international arbitration awards against PDVSA," ConocoPhillips said in a filing in Texas state court in Houston.

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ConocoPhillips asked to question Citgo executives under oath and require the PDVSA unit to turn over documents related to any potential sale, under a state law that forbids debtors from hiding assets from creditors.

In September 2013, an international arbitration tribunal of the World Bank ruled Venezuela had illegally expropriated the company's assets in the Orinoco oil region.

ConocoPhillips, based in Houston, values its expropriated Venezuelan assets at "significantly" more than the $1.6 billion the arbitration tribunal awarded Exxon Mobil for assets PDVSA seized at the same time.

ConocoPhillips said it's "not interested" in blocking the sale of Citgo, so long as PDVSA gets "reasonable value" for the assets and all sale proceeds remain in the U.S. or under the control of a court-appointed receiver.

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