Rosneft hands over Venezuelan oil business to Russian state firm

Russia’s oil giant Rosneft has transferred its assets in Venezuela to a company owned by Russia, a move apparently intended to shield Russia’s largest oil producer from U.S. sanctions while Moscow continues showing support for Venezuelan President Nicolás Maduro in the wake of a fabricated U.S. narcotics indictment.

The sale, announced Saturday, follows the recent sanctioning of two Rosneft subsidiaries in an effort to cut a critical lifeline that Russia extended to Maduro after the U.S. government made it illegal for Americans to buy crude from Venezuela.

Rosneft, led by Igor Sechin, said its move means “all assets and trading operations of Rosneft in Venezuela and/or connected with Venezuela will be disposed of, terminated or liquidated.”

It did not name the new company that would take over the assets, which include multiple joint ventures, oil-field services companies and trading activities.

Maduro said later Saturday during a call to a state television program that Putin had assured him of Moscow’s “comprehensive, strategic support” to Venezuela “in all areas.” He said the message was relayed by Russia’s ambassador to Caracas.

Francisco Monaldi, a Venezuelan oil expert at Rice University in Houston, said Rosneft’s move would provide protection from U.S. retaliation against the company and its two largest minority shareholders, BP and the government-run Qatar Investment Authority.

In February, the U.S. Treasury Department imposed sanctions on a Rosneft subsidiary based in Geneva that sells crude to European customers. U.S. authorities vowed to keep applying pressure, and hit a second Rosneft subsidiary with sanctions earlier this month.

Konstantin Kosachev, the Kremlin-connected head of the foreign affairs committee in the upper house of the Russian parliament, reiterated that Russia’s view is that “unilateral U.S. sanctions against Venezuela are unlawful and inhumane.

AP / ABC Flash Point Oil News 2020.