Paul Singer’s Elliott Management won a court-mandated auction for Citgo Petroleum’s parent company with a $5.9 billion bid in November 2025, positioning the hedge fund to acquire Venezuela’s most valuable foreign asset. But the U.S. military capture of Venezuelan President Nicolás Maduro on Jan. 3, 2026, has thrown the $8 billion transaction into uncertainty, raising questions about contract validity, creditor claims and the legal framework governing the forced sale.
Delaware District Judge Leonard P. Stark approved Elliott affiliate Amber Energy’s bid in November following an eight-year legal battle, calling it the best offer to maximize creditor payments. The Houston-based refiner operates facilities in Illinois, Louisiana and Texas with combined processing capacity of 769,000 barrels per day, roughly 4% of U.S. fuel-making capacity. The company also controls a pipeline network and over 4,000 service stations concentrated on the U.S. East Coast.
The court-mandated sale was initiated in 2022 to satisfy creditor claims against Venezuela stemming from international arbitration awards. These claims primarily arose from assets nationalized during the Hugo Chávez government in the 2000s. Total claims against Citgo reached $20.6 billion, far exceeding available auction proceeds. Creditors including Canadian miner Crystallex International and ConocoPhillips have been pursuing compensation for years.
Amber Energy structured its bid to include $2.1 billion set aside for settlements with holders of the defaulted PDVSA 2020 bond, addressing what many creditors viewed as critical to closing the deal. Singer’s hedge fund previously earned $2.4 billion from Argentina sovereign debt holdings, gaining 10 to 15 times its original investment, demonstrating expertise in distressed sovereign debt situations.
Operation Absolute Resolve, conducted in the early hours of Jan. 3, saw U.S. forces bomb infrastructure across northern Venezuela to suppress air defenses before an apprehension force attacked Maduro’s compound in Caracas. Maduro and his wife Cilia Flores were transported to New York City to face narcoterrorism charges. The couple pleaded not guilty in Manhattan federal court on Jan. 5.
The transition from Maduro’s regime creates fundamental questions about which government entity has authority to negotiate with creditors like Elliott Management. Vice President Delcy Rodríguez was sworn in as acting president on Jan. 5, though her government’s legitimacy remains contested. President Trump stated the U.S. would “run” Venezuela until a transition occurs, but this was contradicted by Rodríguez and later walked back by Secretary of State Marco Rubio.
The provisional government may argue that debts incurred by Maduro’s administration constitute odious debt — obligations created by an illegitimate regime that don’t bind successor governments. This legal doctrine could potentially wipe out billions in creditor claims, including Elliott Management’s positions. Court proceedings involving Venezuelan assets will need to determine which entity has standing to represent the country.
Venezuelan oil assets, which serve as collateral for much of the country’s debt, now face potential redistribution. U.S.-backed opposition figures may push for privatization of PDVSA assets, fundamentally altering recovery calculations that creditors made under the Maduro regime. Venezuela holds the world’s largest proven oil reserves, estimated at 17% of the global total or 300 billion barrels.
The Justice Department’s narco-terrorism case against Maduro in the Southern District of New York could expose financial institutions that facilitated debt transactions during his rule. Discovery in Maduro’s trial may reveal information impacting ongoing creditor litigation and restructuring negotiations. Claims may receive different treatment depending on whether creditors negotiated directly with Maduro’s government or acquired distressed debt on secondary markets.
With enforcement of the arbitration award in Latin America obstructed by asset freezes and ongoing criminal proceedings, Peppertree and Goldman Sachs have requested the New York court order British Virgin Islands authorities to transfer all of Terra Towers’ shares in Continental Towers directly to them. This strategy would allow enforcement through the offshore holding structure, bypassing jurisdictions of countries still investigating fraud allegations related to the case.
The Trump administration announced a 50-million-barrel oil supply deal with the remaining government in Venezuela, with the first $300 million already received on Jan. 20. The U.S. Treasury’s Office of Foreign Assets Control is expected to rapidly adjust its sanctions framework, with sanctions potentially lifted to facilitate oil sales. The shift from “maximum pressure” to reconstruction-focused policies will determine which debt instruments receive preferential treatment in any restructuring process.
Amber Energy CEO Gregory Goff has indicated plans to maintain the Citgo brand while prioritizing operational excellence and keeping more than 4,000 independently owned gas stations operating under franchise agreements. Key operational considerations include refinery modernization investments, supply chain restructuring away from Venezuelan crude, and potential integration with Elliott’s existing refining interests in Marathon Petroleum and Phillips 66.
The transaction removes a critical revenue stream Venezuela previously relied upon, potentially forcing the country to restructure its international oil relationships. PDV Holding’s dissolution marks the end of Venezuelan state control over significant U.S. energy infrastructure, setting a precedent that may affect other state-owned enterprises facing creditor claims in American courts. The ownership transfer remains subject to U.S. Treasury Department approval, which seized Venezuelan assets in U.S. territory in 2019.