Creditors of the Venezuelan state oil company PDVSA are targeting funds held in the company’s accounts in Portugal’s Novo Banco in an attempt to collect unpaid debts.
Puerto Rican bank BSJI in July obtained a Lisbon court order to confiscate funds held in Novo Banco as compensation for PDVSA’s violation of a loan agreement with the bank in 2018, according to court documents seen by Reuters.
US glassmaker OI Glass Inc and Houston-based oil company ConocoPhillips have requested similar orders to collect arbitration awards to nationalize their assets, according to a source familiar with the situation.
The source, who spoke on condition of anonymity because he was not authorized to comment publicly, said the total requests for payments from Novo Banco’s account amount to about $600 million.
The measures represent a new front in the years-long effort to collect the debts of Venezuela, which is struggling with a hyperinflated economy, and US sanctions aimed at pressuring the departure of President Nicolas Maduro and cutting much of its access to the US financial system.
Under Maduro’s government, an economic meltdown occurred in the once prosperous OPEC nation that defaulted on more than $60 billion in bonds. And it owes billions more in arbitration awards.
BSJI won a US$83.9 million court ruling against PDVSA in November in a lawsuit in the United Kingdom, where it agreed with the Venezuelan oil company to resolve its disputes, according to a British court document. The court rejected PDVSA’s argument that it was unable to pay due to US sanctions, according to the document.
A Lisbon district judge granted BSJI the right to confiscate funds held at Novo Banco on July 8, citing the British court’s decision, according to a Portuguese court document.
It was indicated in that decision that “other international creditors are seeking to meet their credits with the amounts deposited with Novo Banco”, without giving further details.
BSJI in December obtained a license from the US Treasury Department’s Office of Foreign Assets Control (OFAC), which is complying with the sanctions, allowing it to receive funds from PDVSA to collect outstanding debt, according to a copy of the license seen by Reuters.
The July 8 ruling in favor of BSJI and details of the bank’s OFAC license were not previously reported.
“BSJI is committed to asserting your legal rights, regardless of the counterparty, the legal forum in which we find ourselves or any other obstacle,” BSJI General Counsel Eric Blum said in a statement.
Neither PDVSA nor the Venezuelan oil and information ministries responded to requests for comment.
Reuters was not immediately able to determine whether it was OI Glass, which is seeking a $500 million arbitration award for the seizure of two factories in Venezuela in 2010, or ConocoPhillips, which won $8.5 billion in compensation related to the seizure of its factories. 2007, he obtained orders from a court in Portugal.
OI Glass and ConocoPhillips declined to comment.
In 2017, OI sold its prize to an unspecified Irish investment fund for $115 million, but may receive additional payments if the fund can collect, documents provided by the company show.
In October 2020, a Portuguese court extended the freeze on the PDVSA account in Novo Banco due to the risk of embezzlement, money laundering or other financial crime, meaning it is unclear when BSJI or other creditors will be able to collect.
The bank in February 2019 halted an attempt by the Maduro government to transfer funds to banks in Uruguay, according to opposition Venezuelan MP Carlos Paparoni.
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