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PDVSA, Citgo Sued by U.S. Glassmaker Over $500 Million Award

Bob Van Voris
PDVSA, Citgo Sued by U.S. Glassmaker Over $500 Million Award

(Bloomberg) -- Owens-Illinois Inc. sued four companies owned by Venezuela, including Petroleos de Venezuela SA and Citgo Petroleum Corp., to collect a $500 million arbitration award over the 2010 nationalization of two plants located in the South American nation.

The suit, filed in federal court in Delaware Monday, claims the companies are "alter egos, and mere instrumentalities of Venezuela itself," and should be forced to pay the award.

Owens-Illinois, a U.S. manufacturer of glass containers, is among a group of companies that have made claims against Venezuela over expropriations of property under President Hugo Chavez, who died in 2013. Crystallex International Corp. and Venezuela agreed to settle a $1.2 billion dispute over the 2011 nationalization of a gold deposit in the South American nation and ConocoPhillips said it’ll get $2 billion in a separate settlement with PDVSA.

Perrysburg, Ohio-based Owens-Illinois is trying to collect on a 2015 award by a three-member panel of the International Centre for Settlement of Investment Disputes, which said the company was entitled to $372 million plus interest. The suit was filed by a Dutch subsidiary, OI European Group BV.

The tribunal found that Venezuela violated its obligations under a 1991 investment treaty with the Netherlands.

Citgo spokeswoman April Andrews didn’t immediately return email and phone messages seeking comment on the suit.

PDVSA is a Venezuela corporation. PDVH, Citgo Holding and Citgo Petroleum are all registered in Delaware with headquarters in Houston.

Venezuela in the midst of a political crisis that threatens the leadership of President Nicolas Maduro. The U.S. and dozens of countries have backed National Assembly leader Juan Guaido as interim president, with the U.S. imposing economic sanctions in hopes of pressuring Maduro to step down.

The case is OI European Group BV v. Bolivarian Republic of Venezuela, 19-cv-00290, U.S. District Court, District of Delaware (Wilmington).

(Updates with details of claim in third paragraph.)

To contact the reporter on this story: Bob Van Voris in federal court in Manhattan at rvanvoris@bloomberg.net

To contact the editors responsible for this story: David Glovin at dglovin@bloomberg.net, Joe Schneider

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