US extends protection of Venezuela-owned Citgo from creditors

WASHINGTON, May 4 (Reuters) - The United States has extended a license that protects Venezuela-owned refiner Citgo Petroleum from creditors through June 19, according to a statement on the U.S. Treasury Department's website on Monday.

The general license, issued by the Office of Foreign Assets Control, is meant to encourage investment and boost ⁠oil output in Venezuela. It also reinforces U.S. protection of Houston-based ​Citgo and its parent companies overseas, which are the crown jewels of ​Venezuela's foreign assets. Citgo is the eighth-largest U.S. refiner.

The previous OFAC license, issued in March, had been set to expire May 5.

Citgo ‌is ⁠expected to be taken over by Amber Energy, an affiliate of hedge fund Elliott Investment Management, following a sale order by a Delaware judge late last year as part of the court-ordered auction of ​its parent, PDV ​Holding, to pay ⁠billions of dollars to Venezuelan-linked creditors.

The auction's winner still needs OFAC to sign off and the protection license to be lifted for the judge's sale order to be fully executed.

Amber officials late last month promised $11 billion in investments in Citgo ​Petroleum if OFAC releases the refiner to Amber, in an opinion column that appeared on the Wall Street Journal website. The investments include adding 125,000 barrels per day in crude oil refining capacity ​at the Corpus Christi, Texas, refinery.

Washington has been easing sanctions on Venezuela since U.S. forces captured President Nicolas Maduro in January, with the ​U.S. government taking control of the OPEC country's oil sales proceeds ​through a fund.