Rosneft rejects US claims Venezuelan operations defy sanctions
By Rosemary Griffin / Platts
Petroleumworld 03 12 2019
Russia's largest crude producer Rosneft said Tuesday that its operations in Venezuela are legal and it will defend its rights in accordance with international law if it suffers damages in connection with claims by US Secretary of State Mike Pompeo that its operations there defy US sanctions.
Late Monday Pompeo accused Rosneft of purchasing crude from PDVSA in defiance of US sanctions, and recently increasing oil supplies to the Maduro regime.
"Russia's state-owned oil company Rosneft continues to purchase crude oil cargoes from PDVSA, Venezuela's state-owned oil company, in defiance of US sanctions," Pompeo said.
"And Rosneft's CEO Igor Sechin continues to throw a lifeline to the regime. Recently Sechin ordered Rosneft to sell even more oil to the Maduro regime."
Rosneft said it was "surprised" by Pompeo's comments and that its activities in Venezuela, which include oil production and supply "are carried out in accordance with international law and existing contracts that were agreed long before the US imposed unilateral sanctions."
Rosneft said it is "evaluating his statements and in the event of any damages will seek to defend its rights in accordance with international law."
In late January the US announced sanctions against PDVSA that serve as a de facto ban on US imports of Venezuelan crude and an immediate ban on US exports of diluent to Venezuela. On February 1, the Treasury also gave non-US companies three months to wind down transactions with PDVSA that involve the US financial system, essentially prohibiting sales of PDVSA crude and products in dollars.
Russian officials have described the sanctions as unfair competition, and open interference in Venezuelan domestic affairs, and pledged to defend Russia's interests in the country using international law. Russia has been a strong supporter of the Maduro government, providing financial assistance, as well as support through state-owned companies including Rosneft.
Rosneft is owed substantial sums under prepayment deals signed with PDVSA between 2014 and 2016. It also holds stakes in five upstream oil projects in Venezuela -- PetroVictoria, Petromiranda, Petromonagas, Boqueron and Petroperija.
ROSNEFT 'NOT ENGAGED IN POLITICS'
Pompeo said Russian loans and investments in Venezuela total more than $17 billion.
"You'll recall PDVSA was once known as the crown jewel of the Venezuelan people, PDVSA now today is a personal ATM for the Maduro regime and for Russian oligarchs and kleptocrats," Pompeo said.
Rosneft said these allegations are baseless and biased.
"Rosneft is not engaged in politics, but exclusively carries out commercial activities in the interests of all shareholders," the company said, adding that it complies with international and national legislation in all of the 26 countries where it operates, including Venezuela.
Citing industry analysts, Rosneft accused the US of trying to restrict supplies to India and China from Iran and Venezuela to benefit suppliers linked to the US administration. it added that it is mainly US companies that are suffering direct damage from the sanctions, naming Chevron, ExxonMobil, Schlumberger, Haliburton, Baker Hughes, Weatherford and ConocoPhilips.
Pompeo said US actions in Venezuela are aimed at securing Venezuelan wealth for the Venezuelan people.
"We're trying to get the oil for the Venezuelan people," he said.
Pompeo's comments followed the US Treasury Department's announcement Monday that it was adding Moscow-based Evrofinance Mosnarbank to its Specially Designated Nationals list of individuals and companies whose US assets are blocked. US citizens are banned from dealing with those on the list.
It accused the bank, which is jointly owned by Russian and Venezuelan state-owned companies, of violating sanctions on PDVSA and financing the petro, Venezuela 's failed cryptocurrency.
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Story by Rosemary Griffin from Platts / SPGlobal.
spglobal.com 03 12 2019
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