*

Gold Reserve's ( GDRZF ) Dalinar has 3 days to improve its bid

*

Amber offers $5.86 billion to creditors

*

Amber also offers $2.86 billion to resolve claims against

Citgo's parent

(Adds context in paragraphs 2 and 4, details in paragraphs 5-8)

By Marianna Parraga

HOUSTON, Aug 25 (Reuters) - A U.S. court officer said on

Monday an affiliate of hedge fund Elliott Investment Management

made the best bid for the parent of Venezuela-owned refiner

Citgo Petroleum, against a group led by miner Gold Reserve ( GDRZF )

previously recommended as the winner.

Improved bids emerged in the final stages of the auction of

PDV Holding, one of the parents of the seventh-largest U.S.

refiner, following court decisions in parallel legal cases that

encouraged new and improved offers.

The evaluation by court officer Robert Pincus could lead to

a new recommended winner if Gold Reserve's ( GDRZF ) subsidiary Dalinar

Energy does not soon match or exceed the terms submitted by

Elliott's affiliate Amber Energy.

Dalinar, whose $7.4 billion bid had been recommended as

winner of the auction last month before the submission of rival

unsolicited bids, has three business days to raise its bid or

modify its terms, a counsel for Pincus said in a court filing.

A sale hearing for Delaware Judge Leonard Stark to make a

final decision is set for mid-September.

Pincus did not provide details of Amber's bid, which was

raised on August 22, but court document revealed earlier this

month the company was offering $5.86 billion to creditors while

also settling claims with holders of a defaulted Venezuelan bond

collateralized with Citgo equity, potentially resolving $2.86

billion of claims against Citgo's ultimate parent, PDVSA.

Amber's proposed purchase price includes cash and non-cash

considerations, and is supported by creditor Koch, the filing

said.

The auction's proceeds are expected to compensate at least a

handful of the 15 creditors fighting since 2017 to recover

nearly $19 billion in U.S. courts after Venezuela expropriated

assets and defaulted on debt.