Page 7 - FSUOGM Week 18 2021

FSUOGM COMMENTARY FSUOGM

For one thing, the US sanctions regime is still prices will remain at or above their current levels
firmly in place, even though one of its biggest for some time.
backers, former President Donald Trump, is no
longer in office. What next?
Trump’s election loss to Joe Biden has gener- In short, Rosneft is likely to continue keeping a
ated some speculation about the possibility that low profile in Venezuela in the near term. It has
Washington might lift some barriers to collab- no compelling economic reasons to return to Rosneft would
oration with PdVSA and its backers in Caracas, that country, and it does not appear to be ready probably have
but so far that has not happened. And it may not to mount a public challenge to the US sanctions
happen any time soon, since the Biden adminis- regime. Its Venezuelan portfolio is – technically, to invest heavily
tration sees Venezuela as a much lower priority at least – now in the hands of another company,
than domestic issues. As such, Rosneft is prob- and its wariness about re-entry may influence before it could
ably keen to continue maintaining a low profile other Russian operators’ attitude about the
in that country for the time being – especially South American state’s attractiveness. resume oil
since US refinery operators have responded to That could change under certain circum- production in
their loss of access to Venezuelan feedstock by stances. If the Biden administration starts
importing more Russian crude. easing sanctions on Venezuela, for example, Venezuela
For another, the Russian oil company cannot Rosneft might return – and the Kremlin might
just pick up where it left off in Venezuela. give Russian oil companies a signal to follow its
The country’s oil infrastructure has dete- lead. Alternatively, if Russia’s government makes
riorated markedly in the last few years, partly relations with Caracas a high strategic priority,
because PdVSA has a long-standing pattern of Russian investors may come under pressure to
underinvestment and partly because sanctions commit to Venezuelan investment projects.
have severely limited PdVSA’s ability to obtain or For the time being, though, little is likely to
pay for the goods, services, equipment and tech- change. Rosneft and the Russian government
nology needed to keep its oil and gas infrastruc- will probably continue to provide PdVSA with
ture in working order. As a result, Rosneft would some degree of behind-the-scenes support,
probably have to spend significant amounts of along the lines of what they have been doing to
money on infrastructure improvements before facilitate Venezuelan oil exports. But the com-
it could resume production. It may not be pre- pany does not appear to be ready to take an
pared to do so without strong evidence that oil active approach in Venezuela yet. ™

PIPELINES & TRANSPORT
Total eyes stake in Novatek’s

LNG transshipment subsidiary

NOVATEK, Russia’s largest privately owned
producer of natural gas, is looking to sell a
minority stake in its LNG transshipment unit to
France’s Total.
According to a statement from Novatek
dated April 28, the two companies have signed
a heads of agreement (HoA) that provides for
Total to buy a 10% stake in Arctic Transship-
ment, a wholly owned subsidiary of Novatek.
The document paves the way for the French
major – which is already taking part in two
Novatek-led LNG projects, Yamal LNG and
Arctic LNG 2 – to expand its involvement in
Russia’s LNG sector.
It will also make Total a shareholder in Arc- Novatek began preparing the Arctic LNG 2 site in 2018 (Photo: Novatek)
tic Transshipment, the company that Novatek
formed to operate two LNG transshipment transshipment points to transfer LNG turned
complexes in the Murmansk and Kamchatka out by Novatek’s joint ventures from Arc7
regions. These complexes, which are still under ice-breaking tankers to conventional tankers.
construction, will include floating LNG (FLNG) Novatek noted that Arctic Transshipment
storage units with a capacity of 360,000 cubic would play a crucial role in establishing export
metres each. They will each use two ship-to-ship routes for its LNG production.

Week 18 05•May•2021 www. NEWSBASE .com P7