HOUSTON (Reuters) -A U.S. court has received last-minute improved bids in a auction of shares in the parent of Venezuela-owned Citgo Petroleum from at least three consortia, potentially raising the price tag for the seventh largest U.S. refiner.

A Delaware court officer overseeing the auction is expected to recommend a winner on Wednesday unless he requests more time to evaluate the revised bids, which were allowed through Tuesday.

The court-organized auction stems from an eight-year-old case that Canadian miner Crystallex initiated in Delaware against Venezuela. The federal court found Citgo's parent, PDV Holding, liable for Venezuela's debts and past expropriations, paving the way for over a dozen other creditors to pursue compensation of nearly $19 billion. 

A second bidding round initiated this year is expected to be completed soon when a winner is selected, following a string of delays, but results could be delayed until all improved bids are evaluated. The final hearing on results was set for August 18.

A $3.7 billion starting bid by Contrarian Funds' affiliate Red Tree Investments, which included a separate $2 billion agreement to pay holders of a defaulted Venezuela bond, kicked off the round in March. Rivals began placing their offers in April.

Rival bidders include a group by a subsidiary of miner Gold Reserve, Rusoro Mining and conglomerate Koch; a group led by private equity firm Black Lion Capital Advisors; and a consortium led by commodities house Vitol, according to court filings and sources.

Elliott Investment Management's affiliate Amber Energy also considered a bid, but it remains unclear if it submitted a revised offer during the "topping" period, which finalized on June 18 but left room to revise offers already submitted through July 1.

Court officer Robert Pincus last month said the recent resolution of parallel legal cases in pursuit of the same assets was encouraging new bids.

How big a loss could this be for Venezuela?

   If Venezuela, which owns 100% of the refiner and its U.S.-based parent companies, fails to retain some equity, it would lose its most significant overseas asset. The country, with foreign debt reaching $150 billion, has already lost other assets in Europe and Asia to creditors.

Delaware Judge Leonard Stark has left open a possibility for parties representing Venezuela to submit an offer. But boards supervising the refiner would need to secure backing from politicians in both Caracas and Washington, a challenge given U.S. sanctions on the OPEC nation and otherwise strained ties.

Prior to the sanctions, Citgo's 807,000-barrel-per-day refining network was a primary processor of Venezuela's heavy sour crudes. Since Citgo cut ties with its ultimate parent, Caracas-based state-run oil company PDVSA, in 2019, Venezuela has struggled to find new markets for its oil, while the Houston-based refiner has resorted to other crude suppliers.

Venezuela's opposition, which through its Congress majority in 2019 appointed the boards that now supervise the refiner, has worked for years to retain Citgo, including funding legal defenses and lobbying in Washington. The U.S. Treasury Department, which has shielded Citgo from creditors in recent years, must approve the auction's eventual winner. 

Opponents of Venezuelan President Nicolas Maduro have said Citgo could aid the nation's economic recovery if democracy is restored. Maduro's officials have rejected U.S. sanctions and called the auction the robbery of a sovereign asset.  

Can creditors claim post-auction compensation?

Yes. Many creditors including ConocoPhillips, which holds the largest claims of almost $12 billion, and Gold Reserve, have pursued legal action outside of the U.S. to seize Venezuela-owned assets, such as bank accounts, tankers and PDVSA-controlled storage facilities.

The creditors, who rejected the outcome of a bidding round last year due to conditions imposed by the winner, Elliott's affiliate Amber Energy, can submit objections if dissatisfied with its results. 

They can also continue parallel cases in other U.S. courts, which so far have not significantly progressed to enforce bond-related claims or prove that PDVSA's U.S. subsidiaries should be liable for Venezuela's debts, a necessary step to pursue Citgo's assets.

Accumulating legal costs and uncertain recovery prospects led three of the 18 creditors originally cleared by the court to withdraw. Others, including an owner of artifacts that belonged to Venezuelan independence hero Simon Bolivar, did not fulfill all court requirements to participate.  

Will all creditors be compensated?

Unlikely. Citgo was valued between $11 billion and $13 billion as part of the Delaware case.

Despite a rising price tag due to last-minute competition among bidders, the refiner's recent weak performance, including a profit that plummeted to $305 million last year from $2 billion in 2023, could affect its valuation.

These factors suggest that a portion of the 15 registered creditors, collectively claiming $18.9 billion, may not receive distributions from the auction.