Page 5 - LatAmOil Week 13 2020

LatAmOil COMMENTARY LatAmOil
 Rosneft’s other main investors are BP with 19.75% and Qatar via QH Oil Investments with 18.93%.
Protecting shareholders
Rosneft spokesman Mikhail Leontiyev told Reu- ters that the company’s exit from Venezuela was aimed at protecting its shareholders.
“We defended the interests of our sharehold- ers and did it in an effective way,” he told Reuters. “Andtowhomtherisksgoisnotanissueforus. The main thing is that the risks are leaving us.”
Rosneft has been under US sanctions since 2014, in retaliation for Moscow’s annexation of Crimea from Ukraine. The existing sanctions restrict the company’s access to international financing, and the equipment, technology and expertise needed to exploit challenging oil and gas projects in Russia. But they do not affect the day-to-day operations of the company.
Washington’s latest sanctions on Rosneft are yet to kick in, with the US Treasury setting a May 20 deadline for the affected subsidiaries to wind down their Venezuelan trading operations. But the measures have already had an impact, with China’s state-run Sinochem Group reportedly refusing to buy oil from Rosneft in mid-March because of the risk that the sanctions would come into force.
The sanctions factor
By transferring its Venezuelan business to another Russian state company, Rosneft is hop- ing that Washington will not follow through with its threat.
The US Treasury has said it will “consider
lifting sanctions for those who take concrete, meaningful and verifiable actions to support democratic order in Venezuela.”
“Now it is our right to expect the fulfilment of the promises that were made publicly by Amer- ican regulators,” a company representative told Reuters.
At the same time, Russia will be able to con- tinue supporting the Maduro regime without exposing its top oil producer to US retaliation. Instead,thegovernmentwilltakeongreaterrisk itself. Doing so is precarious, at a time when the US is reportedly considering sanctions against Russia to force it to cut production, in order to raise oil prices and support struggling US shale producers. Russia and Saudi Arabia have both announced plans to ramp up oil supplies follow- ing the collapse of the OPEC+ pact on output restrictions.
If Rosneftegaz has indeed ceded its stake in Rosneft, this also means that for the first time, the Russian state no longer has a majority share of the oil producer.
Rosneft’s joint ventures in Venezuela include Petromonagas, Petroperija, Boqueron, Petro- miranda and Petrovictoria. The largest of these is Petromonagas, which is 40%-owned by Ros- neft and controls a field in the Orinoco oil belt and a heavy crude upgrader near the Jose oil terminal in northeastern Venezuela.
The Russian company lifted 79,000 barrels per day (bpd) of oil on March 27, according to a PdVSA document seen by Reuters, account- ing for 10% of the country’s total output. It is unclear how these operations will be affected by the transfer. ™
“ latest sanctions
on Rosneft are yet to kick in
Washington’s
Petromonagas was established as a joint venture between Rosneft and PdVSA (Photo: Rosneft)
Week 13 02•April•2020 w w w . N E W S B A S E . c o m
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