Paul Singer, hedge-fund billionaire, bet on a Venezuela-linked oil refiner at just the right time
One wonders if Trump’s pro-Israel donors were a major reason for removing Maduro and opening up Venezuela to capitalist vultures like Paul Singer.
Singer is known for making financial contributions to Republican political candidates, including President Donald Trump. Singer and Elliott, which manages $76 billion, also have a well-known track record of making bold and combative bets in South America that have a political dimension.
Singer’s hedge fund famously waged a 15-year battle with Argentina for debt Elliott had bought before and after the country’s default. Elliott and other holdouts emerged victorious in 2016, earning Singer’s hedge fund $2.4 billion — a gain of about 10 to 15 times its original investment, the Wall Street Journal reported at the time.
As Andrew Joyce noted in 2015:
On its most basic level, the practice is really just the same as Jewish involvement in medieval tax farming. On the older practice, Salo Baron writes in Economic History of the Jews that Jewish speculators would pay a lump sum to the treasury before mercilessly turning on the peasantry to obtain “considerable surpluses … if need be, by ruthless methods.”[2] The activities of Elliot Associates are really the same speculation in debt, except here the trade in usury is practiced on a global scale with the feudal peasants of old now replaced with whole nations. The above cartoon refers to the specific activities of Elliot Associates in Congo where it originally bought $32.6 million in sovereign debt incurred by that country for the knockdown price of under $20 million. In 2002 and 2003, a British court (tactically chosen) forced the Congolese government to settle for an estimated $90 million, which included that all-important interest and fees. Elliot Associates rapidly became known as the quintessential “Vulture Fund.” …
The merciless nature of these Jewish vulture funds has provoked some comment, but the general populations of many countries aren’t familiar with enough of the facts to start joining the dots. Nevertheless, this type of financial parasitism has had a devastating impact on a number of nations. A sovereign’s money is technically owned by its citizens. Making the Panamanian, Argentinian, Congolese, Ecuadorian, Polish or Vietnamese government pay for the full value of the debt, plus interest and fees, even as the major creditors accepted a discounted payment, meant handing citizens’ money to a hedge fund rather than investing in, for example, roads, schools, hospitals, clean water projects or social welfare programs.
This hedge-fund billionaire bet on a Venezuela-linked oil refiner at just the right time
An affiliate of Paul Singer’s Elliott Management won an auction for Citgo late last year
Paul Singer has a track record of making bold and combative bets in South America. Photo: Getty Images
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Amber Energy, an affiliate of Elliott Management, recently won an auction for Citgo Petroleum Corp. with a $5.89 billion bid.
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Citgo’s assets include three U.S. refineries and other downstream assets, which are suited for Venezuela’s heavy crude.
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Venezuela’s oil production is currently about 1 million barrels per day, with potential to quickly increase to 1.5 million barrels per day.
Just a few weeks ago, a U.S. hedge-fund manager known for playing the long game in Latin America won a protracted battle for one of Venezuela’s crown jewels. That bet now looks shrewd in light of the American military operation that captured Venezuela’s president, Nicolás Maduro, over the weekend.
Amber Energy, an affiliate of Paul Singer’s Elliott Management hedge-fund firm, emerged victorious in late November in an auction for U.S. oil refiner Citgo Petroleum Corp. The refiner is a subsidiary of Venezuela’s state-owned company PDVSA.
The forced auction was a lengthy process that pitted Amber Energy against one other contender, Gold Reserves Ltd., a creditor of Venezuela that had its gold- and copper-mining assets expropriated. The winning bid from the Elliott Management affiliate came in at $5.89 billion, lower than the $7 billion bid from Gold Reserves, but a federal judge in Delaware viewed Elliott’s bid as most likely to close, as it included payments to Venezuela’s creditors. The deal is expected to close this year, lawyers involved in the situation have said.
Citgo’s assets include three U.S. refineries located in Lake Charles, La.; Corpus Christi, Texas; and Lemont, Ill., in addition to pipelines, terminals and other downstream assets. Venezuela has massive oil reserves that mostly consist of heavy, sour crude that U.S. Gulf Coast refineries are historically suited to handle.
Venezuela has seen waves of expropriations, starting in the 2000s under President Hugo Chavez and continuing under Maduro. The country began defaulting on its debt obligations in 2017. A U.S. judge eventually forced an auction of Citgo so the proceeds could flow to creditors of the Venezuelan government.
Analysts at Mizuho said in a note earlier Monday that in a “best possible scenario,” U.S. major oil companies will invest in the infrastructure needed to boost Venezuela’s oil production.
Venezuela is producing about 1 million barrels of oil a day, with Chevron Corp. accounting for some 20% of production, the analysts said. “Production should be able to ramp up to around 1.5 million bpd rather quickly, though it will take significantly longer” to get to the 3.5 million barrels Venezuela was pumping before Chavez’s rise to power in the late 1990s, they said.
U.S. publicly traded refiners such as Valero Energy were among the top gainers Monday on hopes that their Gulf refineries, and presumably Citgo’s refineries, would stand to gain from the additional Venezuelan oil arriving at their facilities.
Amber Energy and Elliott did not immediately return requests for comment. On its website, Amber says it is “focused on strengthening CITGO’s world-class assets to deliver essential products that power communities and advance America’s energy advantage.”
Singer is known for making financial contributions to Republican political candidates, including President Donald Trump. Singer and Elliott, which manages $76 billion, also have a well-known track record of making bold and combative bets in South America that have a political dimension.
Singer’s hedge fund famously waged a 15-year battle with Argentina for debt Elliott had bought before and after the country’s default. Elliott and other holdouts emerged victorious in 2016, earning Singer’s hedge fund $2.4 billion — a gain of about 10 to 15 times its original investment, the Wall Street Journal reported at the time.
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