Russia may take control of Venezuelan oil
Caracas is heavily in debt to Moscow, and with U.S. sanctions, no ability to pay it back.
So Caracas is looking to cut a deal.
The Venezuelan government is readying to hand over control over state oil company PDVSA to Russia’s Rosneft, a local newspaper has reported, citing sources from the industry.
Russian TASS reports, quoting El Nacional, that the radical move is being discussed as a way of erasing Caracas’ debt to Moscow. The debt is sizeable: at the end of June this year, money owed to Rosneft alone stood at $1.1 billion. That’s down from $1.8 billion at end-March.
Two years ago, Caracas and Moscow sealed a deal for the restructuring of another $3.15 billion debt to Russia over 10 years with minimum payments over the first six years. Since 2006, Russian loans to Venezuela have reached more than $17 billion in total.
According to the El Nacional report, Moscow had reacted positively to the suggestion, and several commissions had been set up and sent to Venezuela to evaluate the situation at PDVSA.
It's questionable whether Washington won't prevent this from happening. After all, allowing all that oil to fall under the sway of Moscow would essentially be a defeat.
Interestingly, India is also getting involved with Venezuelan oil.
India’s Reliance is set to resume oil imports from sanctioned Venezuela, according to a Reliance representative that spoke to Reuters on Wednesday.
India had stopped its imports of Venezuelan oil months ago after the United States sanctioned Venezuela. Reliance feels secure in its decision to resume the imports, because it will be taking the crude oil in exchange for supplying Venezuela with fuels including diesel, a scenario that is allowed under the sanctions.
Venezuela’s list of crude oil buyers have shrunk in the wake of the sanctions, with Cuba, Russia, and China one of its last remaining customers, but few of those customers pay in cash for all the Venezuelan oil they receive.
Like Reliance’s plan to swap its oil products for crude oil, Cuba swaps goods and services for its oil, while China and Russia both accept crude oil from Venezuela in exchange for loans they already extended to the troubled Latin America country. Of those, Russia’s Rosneft is Venezuela’s largest importer, handling 66% of all of Venezuela’s imports.