Venezuela may lose Citgo after court ruling in favor of Canadian mining company Cristallex

 Jender Milano
5 min read

Citgo has become a central part of the political-economic struggle in Venezuela, although for a long time the country sells more oil to India, China, Russia and other countries than the amount it sent to Citgo, the network that is born from this company and which includes thousands of gas stations in the US, represented for decades an important inflow of foreign currency for the country that now (when it is most needed) could be cut off permanently.

Venezuela may lose Citgo after court ruling in favor of Canadian mining company Cristallex

It all started with the nationalization of gold deposits by the Chávez government in 2008, at that time the Canadian Crystallex owned such deposits, went to international arbitration and the amount imposed by such arbitration was $1.8 billion. The Venezuelan government did not validate the arbitration and since then an open case has been maintained on the part of the mining company against the Venezuelan state.

Who will defend Citgo internationally?

It is a great dilemma that presents itself. In the concert of nations, the largest forum in the world, the UN General Assembly, recognizes the government of Nicolás Maduro as the sole president of Venezuela, the same organizations such as the NAM (Non-Aligned Movement) with 120 countries but for no one is a secret that the US and the financial system that it dominates, as well as 50 countries in the world have expressed their support for the figure of Juan Guaidó as president in charge.

The complexity stems from the fact that in actions endorsed by the US, Juan Guaidó has been taking control of Citgo for months, even mobilizing large resources from it, all obviously outside of Venezuela and at the financial systems level, but this demand from Crystallex would go against the government of Nicolás Maduro since there is no guarantee that international courts will endorse the figure of Juan Guaidó as president in charge, since within Venezuela he has no real power and even among the 50 countries that accompanied him from the beginning, the majority It does not have Guaidó ambassadors in official functions, and they do maintain ambassadors appointed by Maduro on behalf of Venezuela.

The options are several, among them that the Maduro government defends itself against Crystallex's demand on the one hand and the one that supports the United States, Juan Guaidó, acts with an appeal aiming to keep Citgo under its control.

What is Citgo money used for?

Historically it has been used to promote social plans, scholarships... with the Chávez government it was used to promote the so-called social missions and when Juan Guaidó took control a particular situation was created: By not having any possibility of actions in Venezuela, all Guaidó's operations have been executed in bond payments to institutions and bondholders. The government of Nicolás Maduro denounces this as part of the international plot since the country has been blocked both resources such as placement or transactions with bonds in the international market for years as part of the sanctions against the Caribbean nation.

Although for months Venezuela has not received the money from Citgo, since it is administered by Juan Guaidó and cannot invest or take any action with that money in the country, losing Citgo permanently to a foreign company would bring up the debate on the issue of Guaidó or Maduro, and it would lead to a total loss for the future for the country, that is the most alarming.

Attorney for Juan Guaidó and Crystallex case linked

Recent complaints about this case and an investigation opened by the Attorney General of Venezuela Tarek William Saab, locate José Ignacio Hernández, appointed Venezuelan attorney abroad by Juán Guaidó as Crystallex's lawyer in the trial that the company initiated against Venezuela in 2008.

Venezuela may lose Citgo after court ruling in favor of Canadian mining company Cristallex

Attorney Hernández, appointed by Guaidó, joins a list of institutions created abroad a couple of years before the self-appointment of the president of the National Assembly. The Supreme Court abroad was one of these first figures, continued the Attorney General who left Venezuela fleeing from justice and abroad appears before the US and some countries as a prosecutor although in parallel, they address the authorities in Venezuela. These figures already appointed a president abroad before Guaidó, Antonio Ledezma, who went into the background after the self-appointment of Juan Guaidó in January of this year.

Some opposition actors assure that Hernández was never a lawyer in the Crystallex case but an advisor, others say that he was an "expert witness", the truth is that he was involved and tilting the case in favor of Crystallex in his participation. Hence, a complaint that everything is a prior agreement for Crystallex to end up receiving the $1.8 billion from Guaidó with Citgo funds, an amount that the governments of Chávez and Maduro did not agree to pay because they considered it excessive. In this way, before public opinion, Guaidó would appear to have greater control and defend the country's affairs while the foreign company charges what it wants for the nationalized deposit.

Venezuela may lose Citgo after court ruling in favor of Canadian mining company Cristallex

Venezuela remains on the lookout since beyond the image of power that may be strengthened from this case, Citgo is at real risk, one of the most valuable assets in Venezuela, with a strong potential to enter foreign currency into the country and a muscle in the world oil market.