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Rosneft wants to abandon the security right to a stake in Citgo in order to avoid U.S. sanctions



Russia's largest oil company, Rosneft, is negotiating with the Venezuelan state corporation PDVSA.



21.Jul.17 12:54 PM
By Daria Zaytseva
Photo Toinnov.com

   309

Rosneft wants to abandon the security right to a stake in Citgo in order to avoid U.S. sanctions

They are talking about the refusal of its security rights to Citgo shares in exchange for shares in oil and gas fields and fuel supplies. This will allow Rosneft to avoid the negative consequences of U.S. sanctions.

Last year, PDVSA transferred Rosneft's 49.9% stake in its U.S. subsidiary Citgo as collateral to its Russian company for about $ 1.5 billion.

The agreement between Rosneft and the PDVSA caused a flurry of criticism from U.S. senators who do not want Russia to own a significant share of U.S. energy assets, as this may run counter to existing economic sanctions.

Today, negotiations between the two companies are of increasing interest, given the possibility of introducing new economic sanctions of the USA against the Venezuela.

The introduction of new restrictive measures, including the ban on U.S. imports of oil from Venezuela, could damage Citgo's business model and threaten the participation of Venezuela and Russia in the company's assets in the long term.

Negotiations between top managers of Rosneft and PDVSA on the exchange of security rights for Citgo shares for other transactions are being held in Moscow, the source said.

If the parties agree, Rosneft will receive:

- oil products from the Citgo refinery as a partial payment for the loan;

- shares in three oil fields, as well as in two offshore natural gas fields;

- compensation for untimely paid dividends from the joint venture for the production of extra-heavy oil Petromonagas;

- the rights to sell Venezuelan gas condensate from Rio Caribe and to realize its share of oil in joint production projects with PDVSA.

In addition, Rosneft will regularly manage the joint venture with PDVSA and control major purchases, which will allow the Russian giant to strengthen its control over operating activities.





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