Page 4 - LatAmOil Week 13 2020

LatAmOil COMMENTARY LatAmOil
State-owned Rosneft is participating in several joint ventures with PdVSA (Photo: bne file)
Rosneft sheds Venezuelan
business as US sanctions loom
The transaction means that the Russian state is no longer Rosneft’s majority shareholder
WHAT:
Rosneft has sold its Venezuelan operations to a 100% state-owned Russian firm.
WHY:
The oil company wants to avoid US sanctions.
WHAT NEXT:
The deal appears to mean that the Russian state, for the first time, is not the majority shareholder in Rosneft.
RUSSIA’S largest oil company Rosneft announced on March 28 that it had sold all its operations in Venezuela to a company wholly owned by the Russian government – a move aimed at shielding its business from US sanc- tions. In return, Rosneft has receive a 9.6% stake of its own equity, meaning that it is no longer under the majority control of the Russian state.
Rosneft is a major oil producer in Venezuela and has been helping the crisis-struck Latin American country export its crude, in violation of US sanctions. This has provided an economic lifeline to the regime of Venezuelan President Nicolas Maduro, allowing it to maintain a flow of hard currency.
These activities have not gone unnoticed by Washington, which this year slapped sanctions on two Rosneft subsidiaries, Rosneft Trading and TNK Trading International. It is understood that the pair took more than a third of Venezue- la’s oil exports in 2019, reselling the supplies to customers mostly in the Asia-Pacific area.
Rosneft said in a statement that it had trans- ferred its entire Venezuelan business, including its joint ventures with Venezuela’s state-owned PDVSA and its oilfield services, commercial and trading operations, to a 100% state-owned Russian company. In return, it will receive a 9.6% share of its equity capital – which would be worth RUB308bn ($3.9bn) on the Moscow stock exchange as of March 27. This share will be held by a Rosneft subsidiary.
Rosneft did not name the company that had acquired its assets, nor which of its sharehold-
ers was responsible for transferring the 9.6%
stake. However, the oil producer’s majority shareholder is Rosneftegaz, a wholly govern- ment-owned energy holding firm, with a stake
of slightly above 50%. Rosneftegaz also has
shares in Russia’s largest gas producer Gazprom
and power generation firm Inter RAO, as well as
other key Russian state companies. Sources con- firmed to Reuters on March 30 that Rosneftegaz
was indeed the other party in the deal. 
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w w w . N E W S B A S E . c o m Week 13 02•April•2020