Rosneft sells Venezuelan assets to Russia
Russia's largest oil producer, Rosneft, said on Sunday it had terminated operations in Venezuela and sold the assets linked to its operations in the South American nation to an unnamed company owned by the Russian government.
The impact of the move, announced at a time when oil prices are languishing at around $25 per barrel, on Rosneft's upstream joint ventures with Venezuelan state oil company Petroleos de Venezuela was not immediately clear.
The US government has ramped up pressure on Venezuelan President Nicolas Maduro's government, including imposing sanctions on two Swissbased Rosneft units - Rosneft Trading and TNK Trading International that Washington said provided PDVSA a lifeline by acting as intermediaries for its crude.
The change of ownership announced on Saturday means any future U.S. sanctions on Russiancontrolled oil operations in Venezuela would target the Russian government directly. Russia, via the state company Rosneftegaz, owns slightly over 50% of Kremlin-controlled Rosneft's capital.
International shareholders include BP (BP.L), which has 19.75%, and Qatar via QH Oil Investments LLC, which owns another 18.93%.By withdrawing from Venezuela and passing its assets to an entity owned by Moscow, Rosneft, headed by Igor Sechin, a close ally of President Vladimir Putin, transfers the risks related to its Venezuelan operations to the Russian government.
The U.S. State Department did not immediately respond to a request for comment. Rosneft spokesman Mikhail Leontiyev told Reuters the decision to terminate operations in Venezuela was meant to protect the company's shareholders. "We defended the interests of our shareholders and did it in an effective way," Leontiyev said.
"And to whom the risks go is not an issue for us. The main thing is that the risks are leaving us." Rosneft would not disclose the name of the company to which it had sold its Venezuelan operations.
A spokesman for the Russian government confirmed it had purchased Rosneft's operations in Venezuela, but declined to say what company was involved in the deal. Rosneft Trading and TNK took more than a third of Venezuela's oil exports in 2019, allowing PDVSA to continue crude shipments even after U.S. sanctions imposed on the company left many traditional customers unwilling to work with it. But neither company has lifted Venezuelan crude so far in March, and three tankers chartered by Rosneft to transport some 5.7 million barrels left Caribbean waters empty on Saturday after waiting off the Venezuelan coast for weeks. It was not immediately clear if the apparent pullback would lead to a lifting of sanctions on Rosneft Trading and TNK.
The Treasury Department has said it will "consider lifting sanctions for those who take concrete, meaningful, and verifiable actions to support democratic order in Venezuela." "Now it is our right to expect the fulfillment of the promises that were made publicly by American regulators," a Rosneft representative said. Along with some other Russian companies and individuals, Rosneft has been under U.S. financial and technological sanctions since 2014.