CORRECTED-More Venezuela creditors granted right to seize Citgo shares if sanctions change
(Corrects paragraph 5 to note that one of the companies is Huntington Ingalls Industries Inc, not a unit of Northrop Grumman Corp)
By Luc Cohen and Marianna Parraga
March 24 (Reuters) - A U.S. judge has granted four companies the right to seize shares in the parent of refiner Citgo Petroleum Corp to collect on debts owed by Venezuela, in the event U.S. sanctions on that country are modified.
The decision on Thursday is the latest blow to Venezuela's efforts to avoid a breakup of Citgo, which is owned by state oil company Petroleos de Venezuela and controlled by political opponents of the South American country's socialist government.
U.S. District Judge Leonard Stark in Delaware said the four companies had proven that PDVSA was the "alter ego" of Venezuela's government, meaning they could pursue the company's assets to satisfy debts related mainly to expropriation claims.
But Stark said the companies could not seize shares in Citgo's parent, Delaware-registered PDV Holding, until the U.S. Treasury Department, which enforces sanctions, allows it.
The four companies are a unit of O-I Glass Inc, Huntington Ingalls Industries Inc, ACL1 Investments Ltd, and Rusoro Mining Ltd.
Two other companies, Canadian miner Crystallex and U.S. oil company ConocoPhillips had earlier won rulings from Stark allowing them to potentially benefit from any sale of PDV Holding shares once sanctions allow for it.
In 2018, Stark said Crystallex had proven that PDVSA was Venezuela's alter ego. Conoco's claim is against PDVSA.
Washington imposed oil sanctions on PDVSA in 2019 in a push to oust Venezuela's socialist President Nicolas Maduro, who it has accused of human rights violations and rigging his 2018 re-election.
Maduro denies the allegations and has said the U.S. government wants Venezuela's oil. Venezuela is a member of OPEC.
Horacio Medina, the chairman of the opposition-appointed PDVSA board controlling the company's foreign assets, said Venezuela will appeal.
A Citgo spokesperson did not immediately respond to a request for comment.
"Sooner than later, the sanctions as a protective wall will break down and those creditors will be able to take away Citgo," said Jose Ignacio Hernandez, previously the opposition's chief overseas legal representative. (Reporting by Luc Cohen in New York and Marianna Parraga in Houston; Editing by Cynthia Osterman)
