(Adds Crystallex believes settlement possible)
HOUSTON, Oct 11 (Reuters) - An auction schedule to sell shares in Citgo Petroleum's parent company, which could force a breakup of the Venezuela-owned U.S. oil refiner, was approved by a U.S. federal judge and filed on Tuesday.
U.S. District Judge Leonard P. Stark's order sets bidding and sales procedures, hiring of investment banker Evercore Group and directs an approach to the U.S. Treasury Department to seek a decision on any share sale. The Treasury has protected Citgo from creditors by previously not allowing transactions.
Citgo declined to comment on the decision or potential for a settlement.
Delaware District court judge Stark last year approved the sale of shares in PDV Holding, whose only asset is Citgo shares, to pay Canadian miner Crystallex $970 million. The money is outstanding from an expropriation judgment on its Venezuelan assets.
Citgo is the crown jewel of Venezuela's overseas assets, and has split from its Caracas-based ultimate parent, Venezuelan state-run oil firm PDVSA. It is currently under control of Venezuela's opposition leader Juan Guaido.
Horacio Medina, the head of the board supervising Citgo, told Reuters the board is considering its next steps and sees "room to explore alternative options" to any auction. "We are now in meetings with our lawyers to decide the next actions."
Judge Stark's process sets a nine-month calendar after the official launch date before he reviews a high bid. That would mean any sale could not happen until late 2023 or early 2024 if the U.S. Treasury authorizes it, Medina said.
Rahim Moloo, an attorney for Crystallex, welcomed the order as "an important near-final step in this long road to justice."
"Crystallex remains willing to settle this dispute,” he added. "In light of Citgo’s recently-reported profits, it seems clear that Venezuela can pay Crystallex,” Moloo added.
The approved marketing and sales process allows for a stalking-horse bid - a starting bid for any auction - and for the sale to the highest bidder of some or all of the Citgo parent's shares.
The number of shares sold would only be enough to cover the Crystallex judgment and any others the court attaches to the case. U.S. oil producer ConocoPhillips has a $1.29 billion judgment against Venezuela and has been monitoring the case. Koch Minerals and Koch Nitrogen last week applied to the Delaware District Court to link their $387 million judgment.
Citgo Petroleum was valued at about $10 billion in 2014. The refiner posted $1.54 billion in net income for the first six months this year and is expected next month to disclose strong third quarter results. (Reporting by Mariana Parraga and Gary McWilliams Editing by Tomasz Janowski)