*

Share auction to pay for expropriations and defaults

stalled

*

Creditors in Texas, New York courts seek to 'jump'

priority

HOUSTON, Oct 15 (Reuters) -

ConocoPhillips ( COP ) has filed a court motion to preserve

the U.S. oil producer's almost top priority among Citgo

Petroleum creditors to cash proceeds from an auction of shares

in the parent of the Venezuela-owned company.

Citgo is the only asset of PDV Holding, which a U.S.

district court in Delaware has found to be liable for

Venezuela's foreign debts.

Conoco's filing in the court follows

lawsuits

in Texas and New York by holders of Venezuelan bonds and

notes trying to jump the line of creditors. Eighteen creditors

aim to recover as much as $21.3 billion from the auction set to

pay for expropriations and debt defaults by Venezuela.

The auction is expected to be completed in coming

months.

"This action seeks to obtain writs of attachment against the

shares of Citgo Holding in favor of every additional judgment

creditor in the order of priority previously established by the

court," Conoco said in its motion filed this week.

A spokesperson for Conoco declined to comment.

Citgo in 2019 severed ties with its ultimate parent,

Caracas-based state company PDVSA, but they have U.S.

subsidiaries, including Citgo Holding and PDV Holding.

A conditional bid of up to $7.3 billion selected by a court

officer last month would only cover a small fraction of the

claims if approved by the judge.

Conoco has three separate arbitration claims approved by

Delaware to be compensated from the auction's proceeds. One of

the claims, for $1.33 billion, is third in the priority order.

Conoco has in recent months also moved to seize payments to

Venezuela from an offshore natural gas project being developed

by PDVSA, Shell and the National Gas Company of

Trinidad and Tobago.

Conoco was recently granted a license from the U.S. Treasury

Department to seek the payments, Bloomberg reported earlier this

month. Conoco and the Treasury Department have not confirmed the

authorization.

"The risk that the ... defendants might attempt to obtain

writs of attachment against the Citgo Holding shares on the

basis of an alter ego theory is real," Conoco added in its

motion.

"These parties have commenced actions seeking to establish

that PDV Holding is the alter ego of PDVSA or the Republic in an

effort to defeat this court's (property distribution)."