Venezuelan officials peddle oil deals to Moscow

Market: Crude oil, Natural gas
12/11/20

Venezuelan vice president Delcy Rodriguez and state-owned PdV chief executive Asdrubal Chavez arrived in Moscow to discuss possible new oil joint ventures with Russian energy officials and investors.

The official visit is meant to "deepen strategic alliances," Venezuela's government said in a brief statement.

A vice presidential aide in Caracas said Rodriguez will promote a new anti-blockade law promoted by President Nicolas Maduro and approved last month by the government-controlled constituent assembly (ANC) that the US, EU and other governments view as illegitimate.

Maduro's anti-blockade law grants him unlimited discretionary power to sign loan, joint venture and investment agreements with any individual, company or state authority.

The primary intent of the legislation is to protect Venezuela's trading and investment partners from US sanctions, but opposition critics maintain it will be used to strip the Opec country's oil and mineral resources and promote criminal enterprises.

Chavez will meet with Russian government energy officials and oil investors to present a menu of potential joint ventures ranging from the transfer of existing upstream and downstream assets to Russian firms to new projects, Venezuela's oil ministry said.

The Maduro government has offered PdV assets, including its impaired refineries and mature acreage around Lake Maracaibo, to Russian companies such as Rosneft several times since 2017. As yet there have been no agreements, palace and oil ministry officials said.

Rosneft sold its Venezuelan assets to a Russian state-owned enterprise in March 2020 after the US sanctioned two of its trading subsidiaries that had accounted for the bulk of PdV's crude liftings in the period after the oil sanctions were imposed in January 2019. The liftings serviced PdV's debts to Rosneft, part of which is believed to be still outstanding.

Last year PdV announced that it would move its European headquarters from Lisbon to Moscow.

Rosneft maintains a nominal foothold in undeveloped offshore gas blocks in eastern Venezuela.

The Moscow visit coincides with a rocky political transition in the US, where a new administration is likely to show more policy flexibility toward Venezuela and its ally Cuba.

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