UPDATE 1-US extends protection of Venezuela-owned Citgo from creditors

The move followed termination by President Donald Trump's administration of a key license to Chevron to operate in Venezuela. Venezuela's opposition has asked the U.S. to maintain protection of Citgo, the crown jewel of the South American country's assets overseas, as a U.S. court progresses this year in an auction of its parent's shares to pay creditors.

(New throughout, adds details and background) WASHINGTON, March 6 (Reuters) -

The U.S. Treasury Department has extended to early July a license that protects Venezuela-owned refiner Citgo Petroleum from creditors, a notice posted on the department's website on Thursday showed. The move followed termination by President Donald Trump's administration of a key license to Chevron to operate in Venezuela.

Venezuela's opposition has asked the U.S. to maintain protection of Citgo, the crown jewel of the South American country's assets overseas, as a U.S. court progresses this year in an auction of its parent's shares to pay creditors. The Treasury's Office of Foreign Assets Control must greenlight any new owners of the shares once the auction is completed. These owners would ultimately operate Citgo's facilities.

Venezuelan opposition leaders also asked Trump's administration to cut any financing to President Nicolas Maduro, whose two re-elections Washington does not recognize. That led to cancellation this month of an authorization that has allowed Chevron to export Venezuelan crude since 2022. The new license, which supersedes a previous authorization issued in early November, puts on hold until July 3 all transactions related to a bond maturing in 2020 issued by Citgo's ultimate parent, Caracas-headquartered PDVSA.

PDVSA defaulted on that and other bonds, prompting many holders to claim compensation in U.S. courts, going after Citgo and related companies based in the U.S. Maduro and his government have accused the U.S. of trying to "steal" Citgo. Washington has not recognized his re-elections since 2018, leading to oil sanctions on the country in the last six years.

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