Canadian miner targets Rosneft's collateral assets in lawsuit against Venezuela

Canadian miner targets Rosneft's collateral assets in lawsuit against Venezuela
A Canadian gold mining company has asked a US court to seize shares in American-based refiner Citgo. Shares in the subsidiary of Venezuelan state oil company PDVSA were used as collateral for a loan to the parent company from Russia’s Rosneft.

Crystallex is looking to collect $1.4 billion compensation from Venezuela based on last year's ruling by the World Bank arbitration panel over the nationalization of its gold mine in 2011.

In a lawsuit filed on Monday, the Canadian company asked the court to attach shares in Delaware-based PDV Holding, a PDVSA subsidiary, which owns refining firm Citgo Petroleum. Citgo operates three refineries and a system of pipelines and terminals in the US.

The Venezuelan company has rejected the claims, calling them totally inappropriate.

“The corporation will take all necessary legal action to protect its assets,” PDVSA said in a statement.

Last year, 49.9 percent of Citgo shares were offered as collateral when the Venezuelan oil major obtained a loan of $1.5 billion from Swiss-based Rosneft Trading, controlled by Russia’s state-run oil company. The remaining 50.1 percent of shares in Citgo were also used as collateral to other creditors.

Earlier this year, US Congress members raised concerns over the issue, warning the White House that Rosneft's control of a key US supplier could pose a threat to American energy security.

The Russian oil major is reportedly in talks to swap the collateral for oilfield stakes and a fuel supply deal.

Earlier, the head of Rosneft Igor Sechin stressed the company never planned to take over the US-based Venezuelan subsidiary.