Page 4 - LatAmOil Week 25

LatAmOil COMMENTARY LatAmOil
Is Russia gearing up for overtures to Trinidad and Tobago?
Rosneft’s best chance to launch exports from a Venezuelan gas eld may lie in the nearby Caribbean state
WHAT:
The Russian company has secured tax concessions for a gas eld that has no obvious export outlet.
WHY:
Trinidad and Tobago’s LNG facilities are not far from the eld, and they are operating belw capacity..
WHAT NEXT:
Russia could try to strengthen relations with the Caribbean state. If it does, it could run afoul of US sanctions.
ROSNEFT, a state-owned Russian oil operator, has long expressed interest in bee ng up its nat- ural gas business. But the company’s opportuni- ties have been limited on the domestic market, where Gazprom, another government-con- trolled entity, continues to play the leading role. As a result, Rosne has pursued a number of gas projects outside of Russia for the purpose of building up its international portfolio and expanding its ability to trade gas on the world market.
Venezuela has played a role in this campaign – not necessarily because of its own viability as an investment prospect, but because the govern- ments of Russian President Vladimir Putin and his Venezuelan counterpart Nicolas Maduro have been keen on working together.As a result, Rosne has picked up stakes in a number of upstream joint venture projects in Venezuelan over the last decade.
It has also stepped forward to buy out the stakes held by other Russian companies that are now looking to reduce their exposure to Vene- zuela in light of the political crisis now gripping that country.
The Maduro regime, which is working to stave o a takeover attempt by opposition leader Juan Guaido, has certainly been appreciative of these e orts. O cials in Caracas are well aware that Rosne is one of the few companies still willing to work with Venezuela’s national oil
company (NOC) PdVSA, in light of the sanc- “ tions imposed by the US government.
Quid pro quo
Nevertheless, Rosne has made clear that it expects a certain amount of quid pro quo. So far, the Venezuelan side appears to be ready to meet its demands. Earlier this month, the govern- ments of Russia and Venezuela signed an accord that amends a previous agreement dating back to 2009. e document provides for Rosne to receive tax breaks in exchange for developing two o shore gas elds, Mejillones and Patao. It also stipulates that the Russian company will receive a “fair market price” for its assets in the event of an expropriation by PdVSA or the Ven- ezuelan state.
According to information posted on the Rus- sian government’s legal information website, the accord states that Rosne will be exempt from value-added tax (VAT) and from import duties while working at Patao and Mejillones.
Rosneft has made clear that
it expects a certain amount of quid pro quo
In theory, these two elds should be valuable assets for the Russian company. ey hold more than 181 billion cubic metres of gas, enough to support Rosne ’s e orts to enter new markets in Europe and Asia. ey also lie less than 100 km away from Trinidad and Tobago, which owns LNG export facilities that are operating below capacity as a result of the decline in that coun- try’s gas output. 
Venezuelan Ministry of Petroleum
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w w w . N E W S B A S E . c o m Week 25 26•June•2019