Russia's Rosneft Plans to Sell All Assets Related to Venezuela--Update
March 28 2020 - 4:10PM
Dow Jones News
By Ann M. Simmons
MOSCOW -- In an unexpected move, Russian state oil giant Rosneft
announced that it would halt all activities in Venezuela and sell
all its assets related to activities in the country.
"Today, Rosneft entered into an agreement with a company 100%
owned by the Government of the Russian Federation on the sale of
shares and termination of its participation in all projects in
Venezuela, including shares in the production enterprises of
Petromonagas, Petroperija, Boqueron, Petromiranda and
Petrovictoria, in oil-service enterprises and trading operations,"
the company said Saturday in a statement posted on its website.
Based on the agreement, all of Rosneft's assets and trading
operations in and related to Venezuela would be sold, closed or
liquidated, the company said.
Once the transaction is concluded, Rosneft would receive a
package of its own shares in the amount of 9.6% as a settlement
payment, the company added.
The Russian government confirmed that it had acquired assets
from Rosneft, the official state news agency RIA Novosti
reported.
The announcement comes less than three weeks after the Trump
administration added a subsidiary of Rosneft, Geneva-based TNK
Trading International SA, or TTI, to its financial blacklist for
allegedly helping Venezuela sell its oil in violation of U.S.
sanctions. That embargo followed Washington's decision in February
to sanction Swiss-registered Rosneft Trading SA, warning that
anyone caught doing business with Rosneft's subsidiary risks being
sanctioned by the U.S.
There was no immediate reaction from Caracas. Calls and emails
to the Information Ministry as wells as state oil monopoly
Petróleos de Venezuela SA, or PdVSA, were not immediately returned.
The government of President Nicolás Maduro, already reeling from a
severe economic depression and low oil output amid U.S. sanctions,
took another hit this week as U.S. prosecutors indicted the leftist
leader and unveiled a $15 million reward for his capture for
alleged narcotics trafficking.
The Obama administration first imposed sanctions on Rosneft and
a slate of Russian businesses and officials in 2014 to put pressure
on President Vladimir Putin and Ukrainian separatists to cease
their military activity in eastern Ukraine, where a slow-burning
conflict was triggered following Moscow's 2014 annexation of the
Crimean Peninsula that was controlled by Kyiv.
The Trump administration has since been trying to curb the
revenue from oil, gold and other sanctioned sectors that have been
helping to keep Mr. Maduro in power. Mr. Putin vowed to back Mr.
Maduro, a longtime ally, after Venezuelan parliament speaker Juan
Guaidó declared himself interim president in January last year,
drawing support from several Latin American countries and the
U.S.
Relations between Moscow and Caracas date to 1857, when Russia
recognized Venezuela's independence. Venezuela recognized Russia as
the Soviet Union's successor in 1991 and five years later the two
countries signed a treaty of friendship and cooperation.
In recent years, the two nations undertook joint trade and
economic investment projects, mainly involving the development of
oil-and-gas fields.
Rosnetft and state-owned Petróleos de Venezuela are implementing
five oil projects in Venezuela with a total production of 9 million
tons a year -- 7% of the country's total production,
state-controlled news agency TASS reported last year. The fate of
these projects were unclear following Saturday's announcement.
--Ian Talley and Kejal Vyas contributed to this article.
Write to Ann M. Simmons at ann.simmons@wsj.com
(END) Dow Jones Newswires
March 28, 2020 15:55 ET (19:55 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.