August 10, 2018 / 1:01 AM / a year ago

UPDATE 2-U.S. court allows Crystallex to attach shares of Venezuela Citgo owner

(Updates with lawyer no comment, context)

By Brian Ellsworth and Deisy Buitrago

CARACAS, Aug 9 (Reuters) - A United States court has approved a request by Canadian gold miner Crystallex to attach shares in a U.S. subsidiary of Venezuelan state oil company PDVSA that indirectly controls refiner Citgo, according to a filing on Thursday.

Crystallex is seeking to collect a $1.4 billion award in compensation following a decade-long dispute over Venezuela’s 2008 nationalization of Crystallex gold mining operation in the South American nation.

Judge Leonard P. Stark of the United States district court in Delaware granted Crystallex’s request but held off actually issuing a writ to attach seizure order until the parties advised him on how to proceed. The judge also let parties propose a redacted ruling before he issues a public decision.

Crystallex lawyer Bob Weigel declined to comment. PDVSA did not immediately respond to a request for comment. A source close to PDVSA said the Caracas-based company was mulling an appeal.

Venezuela handed Russian oil major Rosneft a 49.9 percent collateral in Citgo in return for a $1.5 billion loan two years ago. The remaining 50.1 percent of shares in Citgo is collateral for holders of PDVSA’s 2020 bond.

The cash-strapped Venezuelan government has little in the way of offshore assets which has encouraged creditors to consider ways to pursue Citgo.

Houston-based Citgo was valued as high as $10 billion during an aborted 2014 sale process.

Venezuela’s opposition said leftist President Nicolas Maduro was putting the OPEC nation’s assets at risk.

“We’re starting to lose foreign assets because of this irresponsible and corrupt government,” said opposition lawmaker Angel Alvarado on Thursday night. (Reporting by Brian Ellsworth; additional reporting by Alexandra Ulmer and Noeleen Walder; editing by Clive McKeef)

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