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Auction manager seeks more time to review, negotiate bids

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Motion does not say how many or amount of bids received

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Court auction aims to satisfy $21 billion in claims

By Marianna Parraga

HOUSTON, June 28 (Reuters) - A U.S. court has been asked

to postpone to Sept. 19 a hearing to present the winning bid in

an auction of shares in the parent of Venezuela-owned refiner

Citgo Petroleum, according to a motion filed with the court on

Friday.

The Delaware court officer evaluating bids in a historic

auction of shares in a parent of the seventh largest U.S. oil

refiner requested the two-month delay to complete his evaluation

and finish negotiating with bidders, the motion said. The motion

has to be accepted by the judge to go into effect.

The case has broken new legal ground in enforcement of

international arbitration awards and on cracking sovereign and

corporate immunity. The auction is expected to lead to an

ownership change of Venezuela's foreign crown jewel to satisfy

$21.3 billion in claims against the South American country.

The court had planned to finish the sale process, which has

included two bidding rounds, on July 15, days before Venezuela's

presidential election on July 28, which Washington sees as a

possible exit to the South American country's long-standing

political crisis.

COMPETITIVE BIDS

Among the several competitive offers, "multiple bids were

actionable," Robert Pincus, the court officer overseeing the

auction, wrote in the motion. Additional time is required to

clarify the terms of some bids and negotiate a definitive sale

agreement, he added.

Pincus also asked the court for permission to consider

unsolicited bids if he deems one "higher or better" than those

received by the court's June 11 submission deadline.

None of the bids submitted this month met the total claims

filed with the court, two people close to the matter told

Reuters this week, predicting the delay. The motion requesting

the delay did not disclose the number of bids in the second

round or their amounts.

Citgo is the seventh largest U.S. oil refiner with storage

terminals, pipeline participations and three refineries that can

process up to 807,000 barrels per day of crude oil into fuels.

In 2019, it severed ties with its ultimate parent,

Caracas-headquartered state oil company PDVSA.

Venezuelan President Nicolas Maduro's administration and his

political opposition have been requesting the U.S. government to

delay or halt the auction, so that its results do not alter the

election outcome.

In a first bidding round in January, offers submitted by

investors reached $7.3 billion, compared with a market valuation

of between $11 billion and $13 billion for the Houston-based

refiner.

Lawyers representing Venezuela called them "disappointing"

and recently have pressed the court to organize a third round if

offers in the second round that finished this month do not

approach a fair value for the company.

At least five groups of investors submitted binding bids in

the second round, and three secured financing commitments from

banks and advisors including JPMorgan ( JPM ), Morgan Stanley ( MS )

and Rothschild & Co, people close to the

matter told Reuters this month.

A hearing scheduled for July 2 is expected to update the

court on the progress of his evaluation. The judge could act on

the request at that time.