Activist Elliott’s Citgo Deal May Deliver a Windfall in Wake of Maduro’s Ouster

Activist hedge fund Elliott Investment Management may hit the 2026 geopolitical megalottery. 

The firm is on the verge of taking possession of Venezuela’s most valuable foreign oil assets, all at a massively discounted price tag.

The Deal of a Field Lifetime

Since the 1980s, Citgo Petroleum has operated as the US-based subsidiary of Petróleos de Venezuela (PdVSA), Venezuela’s state-owned oil and gas company. Based in Houston, it owns three Gulf Coast refineries, dozens of oil terminals and runs a network of thousands of independently owned gas stations.

But in November, a federal judge approved the $5.9 billion sale of the company to Amber Energy, an affiliate of Elliott, the activist known for its headline-making tussles with Southwest Airlines and PepsiCo. Citgo was put up for sale after US economic sanctions targeting PdVSA were rolled out in 2019. The company’s facilities are purpose-built for refining heavy crude oil, which is dense and more difficult to process into gasoline and other fuels. Without Venezuelan crude, Citgo was forced to buy heavy crude from pricier sources such as the Canadian oil sands, crunching its margins in the process. A Citgo sale was forced by creditors seeking to recover bond payments Venezuela defaulted on. Elliott, a holder of a significant amount of those bonds, included their face value in its bid.

The Citgo assets could prove a massive bargain: Analysts estimate they’re worth $11 billion to $13 billion, roughly double Elliott’s bid. The Venezuelan government claims they’re worth $18 billion. But Elliott’s windfall is not in the bank just yet:

• Delcy Rodríguez, now Venezuela’s acting president, denounced the sale as “fraudulent” and, last month, Venezuela and Citgo appealed the judicial sale to keep the assets under domestic control. While Elliott’s affiliate, Amber Energy, believes it will close the deal this year, it’s also awaiting approval from the Treasury Department.
• President Trump has made bullish projections that America’s big oil firms will rush to invest billions in revamping Venezuela’s oil sector, benefiting Citgo’s refineries, which have a daily processing capacity of 769,000 barrels. Venezuela, due to its mismanaged infrastructure, produces just 934,000 barrels per day, or less than 1% of global supply, despite having the world’s largest reserves. At the same time, experts and oil industry insiders have been far more cautious in their statements.

No Stranger: Elliott has a history of playing hardball with South American governments. In 2012, it joined a group of bondholders that seized an Argentine Navy vessel to pressure the country to repay defaulted bonds. Four years later, in 2016, Elliott received $2.4 billion from Argentina, a 392% return on its original investment.