The acquisition of Citgo Petroleum by Amber Energy, an entity backed by Elliott Investment Management, represents a major move in the U.S. refining sector. The buyout is the result of legal proceedings aimed at settling the debts of Venezuela and its national oil company, PDVSA, totaling approximately $21.3 billion. Citgo, a strategic asset for Venezuela, is also the seventh largest refiner in the US market, with processing capacity of 807,000 barrels per day split between its refineries in Texas, Louisiana and Illinois. In 2023, the company generated a net profit of $2 billion.
Elliott’s interest in Citgo stems from various unpaid debts by Venezuela, which have prompted creditors to seek compensation through the auction of shares in PDV Holding, Citgo’s parent company. Amber Energy, led by Gregory Goff, former CEO of Marathon Petroleum and current board member of Exxon Mobil, was named as the lead bidder in the auction. The repurchase price proposed by Amber, estimated at USD 7.28 billion, is far from compensating all of the debts, but would enable part of the payments expected by international creditors to be released.
A complex takeover with repercussions on the American market
The Citgo takeover operation raises several questions of competition and industrial strategy in the United States. Citgo and Exxon Mobil are direct competitors in the fuels and lubricants market, and current Exxon CEO Gregory Goff’s involvement in this acquisition through Amber Energy could attract the attention of federal regulators. Indeed, any excessive concentration in the refining sector could be perceived as a market imbalance, prompting the Federal Trade Commission (FTC) to closely examine the implications of this transaction.
Citgo’s positioning in the American market remains strategic: the company has a network of 4,200 independent retailers, significant storage infrastructure, and a network of pipelines allowing it to effectively serve several regional markets. With financial support from Elliott, Amber could restructure Citgo to optimize the profitability of its assets, possibly through the sale of certain less profitable segments. However, the specter of new disputes with other Venezuelan creditors hangs over this transaction, complicating the company’s governance and limiting its room for maneuver in the short term.
Gregory Goff: a key figure for Amber Energy
Gregory Goff, with 40 years of experience in the energy sector, plays a key role in this operation. After a career marked by his leadership positions at Marathon Petroleum and Andeavor, where he led significant restructurings, Goff is also recognized for his ability to maximize asset value in a competitive environment. His appointment as CEO of Amber Energy demonstrates Elliott’s desire to place experienced leadership at the helm of Citgo to navigate this complex environment.
Amber Energy, while positioning itself as an independent entity, could benefit from the long collaboration between Goff and Elliott. The most prominent example remains the successful spinoff of Marathon Petroleum’s Speedway division, which led to its sale to 7-Eleven for $21 billion in 2021. This strategy could repeat itself with Citgo, particularly if Amber decides to resell certain Citgo assets to maximize short-term returns, while streamlining core refining operations.
The geopolitical implications of the Citgo takeover
Citgo is not a simple oil asset: its control has long been a major geopolitical issue between the United States and Venezuela. Since the Trump administration recognized the interim government of Juan Guaidó in 2019, control of Citgo has remained contested. The takeover by Amber Energy could thus change the situation, by further isolating the Nicolás Maduro regime, which would thus lose a key asset for its international finances. Additionally, the role of Elliott, an activist fund known for its aggressive stances, could exacerbate tensions with other creditors seeking to recoup their stake through ongoing litigation.
The issue is also strategic for the United States, which seeks to secure its fuel supply and reduce its dependence on energy sources deemed “at risk”. By integrating Citgo into Amber’s portfolio, the United States could strengthen its position in the fuels market while reducing Venezuela’s influence in the American refining sector.
