*

Court officer to recommend auction's winner by July 2

*

Judge Stark instructed advisors to prioritize price over

certainty of closure

*

Resolution of parallel cases might have encouraged new

bidders

(Adds details about Black Lion in paragraphs 5-6, procedure

details in paragraphs 8-9 and 11-12)

By Marianna Parraga

HOUSTON, June 25 (Reuters) - Black Lion Citgo Group, a

consortium led by private equity firm Black Lion Capital

Advisors, submitted an $8 billion all-cash bid for the parent of

Venezuela-owned U.S. refiner Citgo Petroleum as part of a

court-organized auction of shares, the company said in a filing

released on Wednesday.

Following the selection of a $3.7 billion offer by Red Tree

Investments as starting bid in April, a court in Delaware

received rival offers until June 18 for Citgo's parent PDV

Holding as part of a bidding round aimed to pay up to 15

creditors for debt defaults and expropriations in Venezuela.

The auction's winner is expected to be recommended by a

court officer overseeing the sales process by July 2, with a

final hearing set for August 18, according to a schedule

recently updated by the court.

Black Lion's offer, submitted last week, is backed by

investors Quazar Investment, Anex Management and Fortress

Management and includes an $8 billion base purchase price plus

court and government fees and insulation funds for up to $3

billion, according to the filing.

The Black Lion group did not participate in the first phase

of the bidding round earlier this year, when a starting bid was

chosen, according to court filings and sources. Black Lion did

not immediately reply to a request for comment.

When the auction's schedule was extended this month, court

officer Robert Pincus said the resolution of parallel legal

cases in pursuit of the same assets was expected to encourage

new offers in the last mile of the sales process.

A consortium of miners Gold Reserve ( GDRZF ) and Rusoro

and conglomerate Koch also submitted an improved offer

as part of the bidding round's topping period, Gold Reserve ( GDRZF ) said

earlier this month, without revealing details.

The group, which only includes companies that also are

creditors in the case, had offered $7.1 billion for the shares

during the starting bid phase, but its offer was not chosen

because of its lower "certainty of closure," Pincus told the

court.

Two rival groups led by affiliates of commodities house

Vitol and hedge fund Elliott Investment Management were

considering bids in this round, but their submissions have not

been confirmed. A $7.3 billion offer by Elliott's affiliate

Amber Energy won the first bidding round last year, but was

ultimately rejected by most creditors.

Black Lion's offer "exceeds the current stalking horse bid

and all reported topping bids publicly known to date" and "is

backed by committed institutional funding, with documented

capacity greatly exceeding $12 billion," the company told the

court.

Judge Leonard Stark, who is in charge of the eight-year

case, instructed Pincus to prioritize price over certainty of

closure in this phase of the auction.

As the sale process completion approaches, some creditors

including Gold Reserve ( GDRZF ) are asking the court to request

clarification from the U.S. Treasury Department on its

protection over Citgo, which has been in force in recent years

freezing any change of ownership of the seventh largest U.S.

refiner.