A Russian company that used to provide a solution to US trade sanctions against Venezuela is avoiding a new round of penalties, according to documents, this time from Europe and the United States, for the invasion of Ukraine.
Russia is one of Venezuela's few allies. Russian companies have helped Venezuelan state-owned PDVSA keep its crude production afloat amid sanctions imposed by Washington to force Nicolás Maduro out and block his access to oil revenues.
Roszarubezhneft was incorporated in 2020 and soon after it acquired shares in Venezuela from the hands of the Russian giant Rosneft after two units of that company were sanctioned by the United States for trading in Venezuelan oil.
The five joint ventures in Venezuela where Roszarubezhneft participates produce about 125,000 barrels per day (bpd) of crude oil and employ around 200 workers, including expatriates and local employees, according to sources and analysts. That is equivalent to 16% of the 788,000 bpd that Venezuela produced last month.
Roszarubezhneft is now trying to transfer ownership of its assets in Venezuela from its units in Europe to another company in Moscow to avoid possible embargoes or confiscations amid sanctions against Russia, according to company documents seen by Reuters.
Transferring ownership of the assets was necessary to “preserve control and management of assets and the stable operation of its business units,” according to a March 16 letter sent by a Roszarubezhneft executive to its Venezuelan subsidiaries.
The letter did not say when the transfer could take place, nor where in Europe the companies would be registered. Roszarubezhneft executives blamed their plight on the “hostile actions of the United States and its allied foreign states and international organizations” for their plight.
The sanctions have already affected the company's business in Venezuela by forcing them to convert hard currency payments from wages and suppliers to rubles and bolivars, according to the documents.
Rubles are not widely accepted in the Venezuelan economy, increasingly based on the dollar, and there are no authorized foreign exchange companies. Russian workers paid in rubles would have to find someone willing to exchange them for dollars or euros.
Root sanctions
Washington has imposed sanctions on Venezuelan oil trade since 2019, progressively expanding the list of vetoed entities. The measures produced an abrupt drop in the level of exports of the OPEC partner country, but have not managed to get out of Maduro, whose re-election in 2018 was described by Washington as a farce.
Most of Rosneft's employees in Venezuela remained in the country after the transfer of assets, according to two sources with knowledge of the matter. A former head of the company in Venezuela is now the legal representative of Petrolera (Cyprus) Limited, one of Roszarubezhneft's units, according to one of the documents seen by Reuters and online corporate records.
Roszarubezhneft is owned by the Russian Federal Agency for the Management of Government Property, a unit of the Ministry for Economic Development, according to the Russian state agency Tass, which said the company had settled with capital equivalent to $4,066 million.
The March 16 letter from the Roszarubezhneft executive urged managers in Venezuela to immediately complete capital transfers and notify PDVSA of the change.
The shares in the joint ventures Petroperijá, Boquerón and Petromonagas are controlled by units established in Europe and would be being transferred to Petromost. The latter company, based in Russia, is also owned by Roszarubezhneft, according to online corporate records.
The Venezuelan oil company has not been formally notified, a person familiar with the matter told Reuters on Monday. Executives from both companies met last week in Caracas, the source added.
PDVSA did not respond to a request for comment. Roszarubezhneft did not immediately respond to questions sent through its website and it was not possible to contact the company in Caracas through the telephone lines used by Rosneft.
(Reuters)
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