The Crystallex award collection problem could be resolved through and by CITGO.

Venezuela cannot pay the $1.4 billion award plus interest for economic and political reasons. It cannot shell out this amount of money because 1) it does not have the money and 2) if it had the money or could get it, making the payment would be a moral and political suicide, given the country's dire need for money to buy food and meds for its 20+ million citizens that are at risk of dying from starvation and lack of medical care. This is the reason why over three million Venezuelans have emigrated thus far; a number that is expected to continue to grow without a prompt solution. The emigration wave is having a major impact on the countries to the south, which are hardly able to properly deal with the Venezuelans scaping from unabated starvation and lack of healthcare.

So, how can this be resolved with and through CITGO: Financial engineering.

Here are the numbers:

CITGO's enterprise value is estimated at $8.0 to $13.0 billion. The value gap is determined by the potential cost synergies with and its strategic value to the potential buyer. So, a buyer looking for downstream revenue through geographically advantageous refinancing operations and a retail distribution will pay more for CITGO than a buyer looking at it as a pure refining operation (i.e. a wholesale business operation). If Venezuela wanted to sell CITGO, it would obviously choose the former type of buyer. Trouble is that CITGO is worth much more than $13 billion to Venezuela since it needs to restore its dilapidated oil production back to 3-4 million barrels / day (from 800 thousand barrels / day today) to be able to recover its economy any time soon. Hence, selling or losing CITGO is the last thing on Venezuela's mind.

PDVSA collateralized debt financing with liens on 100% of CITGO's shares. Thus, Russia's Rosneft obtained a 49% of the liens on CITGO for a $1.5 billion loan. And the 2020 bondholders got the remaining 51% lien on CITGO for the $3.4 billion financing loan, whose current outstanding face value is $1.7 billion and trade at $0.67 on a dollar. So, a business that is worth between $8-13 billion is fully pledged for $3.2 billion in loans.

So, how can Venezuela come out of the big hole it dug itself into with CITGO by reneging on its debt to Crystallex? The possibilities are limited while CITGO and PDVSA are controlled by two different Venezuelan governments.

The answer is: They need to be smart, responsible and willing to find a solution, or be afraid that Crystallex will force the legal collection and create a bigger problem that will be more difficult and costlier to extricate itself out. Thus far Venezuela has demonstrated time and time again that it will not face its responsibility and honor its debt unless it finds itself between a rock and a hard place.

If Venezuela were responsible and willing to resolve its Crystallex issue, it would have opportunity to resolve it with CITGO’s help. Otherwise, Crystallex has but one option to close this long-delayed collection: pursue its U.S. legal collection efforts availing itself of all available options.