The White House suspended some of the financial sanctions on Venezuela on Thursday, but it’s no lifeline to dictator Nicolas Maduro. Instead, Juan Guaido has been given three months to “restructure or refinance payments”. The opposition to dictator Nicolas Maduro is counting on Citgo’s profits to rebuild Venezuela if or when Maduro is ousted from power.
The U.S. Treasury Department issued an order giving Guaidó’s team three months to “restructure or refinance payments,” by suspending the terms of some financial sanctions that were originally intended to pressure Maduro from office. A likely failure to make $913 million debt payment due Monday could have triggered foreclosure.
Guaidó said U.S. officials are helping protect Venezuela’s assets that Maduro’s government exploited at the people’s expense.
This is a move to shield Venezuela’s opposition leader from losing control of Citgo’s refineries. It is important for Guaido to hold on to control of Citgo, a Houston-based company with U.S.-based refineries, owned by Venezuela since the 1980s as part of the state-run oil company PDVSA. The U.S. refineries are in Louisiana, Texas, and Illinois, with a network of pipelines crisscrossing 23 states also in the mix.
Guaido tweeted in response (translation is shown):
Durante años, el régimen endeudó a la Nación, hipotecando el futuro de los venezolanos que hoy padecemos una emergencia humanitaria compleja.
— Juan Guaidó (@jguaido) October 24, 2019
“For years, the regime indebted the Nation, mortgaging the future of Venezuelans who today suffer from a complex humanitarian emergency. Thanks to the support of the Gob of the #EEUU , and its confidence in our management, we are managing to maintain the assets that the regime looted.”
As a quick refresher, since the dire situation in Venezuela often gets overlooked in the 24/7 news cycle focused almost entirely on President Trump’s impeachment, Guaido is the head of the opposition-led National Assembly. In January he declared himself as president and in control of presidential powers. National Assembly’s goal is to end Maduro’s presidency and over twenty years of socialist rule. The Trump administration recognized Guaido as the legitimate leader of Venezuela. A board was appointed by the opposition to take control of Citgo, with the approval of U.S. courts. Citgo’s value is estimated at $8 billion. Venezuela provides between 5% and 10% of U.S. gasoline. It is to the benefit of the United States to support Guaido, and President Trump’s administration realizes it.
The battle for control of Citgo in Venezuela is not a new one. In 2016 National Assembly opposed Maduro’s deal with creditors.
In 2016, Maduro’s government made a deal with some bondholders of the state-owned oil company PDVSA, agreeing to swap their bonds for new ones maturing in 2020.
Maduro gave the creditors 50.1% of Citgo as collateral over objections from the opposition-led National Assembly, which argued the deal was illegally carried out without their approval.
Maduro accuses the opposition of illegally getting control of Citgo, saying it is part of the “imperialist” United States’ attempt to install Guaidó as a “puppet” government.
When Maduro is removed from power, if the actions from the National Assembly are successful, Citgo will be a substantial source for funding the rebuilding of Venezuela. Venezuela has vast oil reserves; Citgo is the cash cow. The crude oil can be sold or refined as needed. At a time when the country is failing, unable to provide for its population, all because the country’s wealth has been squandered by corrupt dictatorships for decades, this is a lifeline of hope for those working to save their own country. It’s a good move by the Trump administration.