CARACAS--A Russian oil firm is asking Venezuela's state-run company PDVSA for permission to take control of exports from their joint ventures to revive cash flow from the five companies, which have been hard-hit by U.S. sanctions, two people involved in the talks said. Roszarubezhneft - a state-owned company that acquired Russian oil major Rosneft's assets in Venezuela in 2020 - wants to market the crude and fuel oil produced by the joint-ventures - similar to a deal PDVSA struck last year with U.S. oil producer Chevron. Roszarubezhneft's five joint ventures now must rely on PDVSA-designated intermediaries that take a large share of the revenues for their services, the people said. The joint ventures are owed about $3.2 billion from sales handled by PDVSA, one of the people said. PDVSA separately owes Roszarubezhneft some $1.4 billion from loans previously extended, the person said, adding that PDVSA is disputing that amount. "Roszarubezhneft is ready to act as an offtaker," one of the people familiar with the matter told Reuters, using industry terminology for being able to sell cargoes itself to customers. Roszarubezhneft, Russia's oil ministry, PDVSA and Venezuela's oil and foreign affairs ministries did not reply to requests for comment. Rosneft declined to comment. The proposal may face significant hurdles because it would require a change to the Venezuelan law governing its oil exports and comes at a time when PDVSA is trying to rebuild its own finances after an audit found billions of dollars in unpaid sales for past exports. Under Venezuela's statutes, the state oil company has control over the sale of oil and fuel exports.
However, PDVSA last year agreed to a workaround with Chevron that allowed the U.S. oil major to market crude from its joint ventures in payment for outstanding debt and dividends. Washington granted Chevron an exemption to U.S. sanctions on sales of Venezuelan oil so it could recover money owed to it but said cash payments to PDVSA were forbidden. Approval of Roszarubezhneft's request could provide Russia with an additional source of cash at a time when Western sanctions for the war in Ukraine have clobbered its oil revenues and deepened a budget deficit. It also could help PDVSA make progress toward its goal of raising Venezuela's oil output by 40% this year. Russian firm asks Venezuela to match Chevron oil-for-debt deal CARACAS--A Russian oil firm is asking Venezuela's state-run company PDVSA for permission to take control of exports from their joint ventures to revive cash flow from the five companies, which have been hard-hit by U.S. sanctions, two people involved in the talks said.
Roszarubezhneft - a state-owned company that acquired Russian oil major Rosneft's assets in Venezuela in 2020 - wants to market the crude and fuel oil produced by the joint-ventures - similar to a deal PDVSA struck last year with U.S. oil producer Chevron. Roszarubezhneft's five joint ventures now must rely on PDVSA-designated intermediaries that take a large share of the revenues for their services, the people said. The joint ventures are owed about $3.2 billion from sales handled by PDVSA, one of the people said. PDVSA separately owes Roszarubezhneft some $1.4 billion from loans previously extended, the person said, adding that PDVSA is disputing that amount. "Roszarubezhneft is ready to act as an offtaker," one of the people familiar with the matter told Reuters, using industry terminology for being able to sell cargoes itself to customers. Roszarubezhneft, Russia's oil ministry, PDVSA and Venezuela's oil and foreign affairs ministries did not reply to requests for comment. Rosneft declined to comment. The proposal may face significant hurdles because it would require a change to the Venezuelan law governing its oil exports and comes at a time when PDVSA is trying to rebuild its own finances after an audit found billions of dollars in unpaid sales for past exports.
Under Venezuela's statutes, the state oil company has control over the sale of oil and fuel exports. However, PDVSA last year agreed to a workaround with Chevron that allowed the U.S. oil major to market crude from its joint ventures in payment for outstanding debt and dividends. Washington granted Chevron an exemption to U.S. sanctions on sales of Venezuelan oil so it could recover money owed to it but said cash payments to PDVSA were forbidden. Approval of Roszarubezhneft's request could provide Russia with an additional source of cash at a time when Western sanctions for the war in Ukraine have clobbered its oil revenues and deepened a budget deficit. It also could help PDVSA make progress toward its goal of raising Venezuela's oil output by 40% this year.
