Russian energy giant Rosneft on Saturday announced it had terminated operations in Venezuela, selling its assets to a company wholly owned by the Russian government.
Under the deal, Rosneft sold five joint ventures it had held with Venezuelan state-owned oil company Petroleos de Venezuela, S.A. (PdVSA), as well as oil-field services firms, commercial and trading operations. Any remaining assets “will be disposed of, terminated or liquidated,” the Russian company said.
Rosneft held its stake in one of the joint ventures, Petromonagas, through a chain of wholly owned subsidiaries based in Europe, according to corporate records. Rosneft Energia GmbH owned 40 percent of Petromonagas, while a PdVSA subsidiary owned the rest, records show.
In the statement announcing the deal, Rosneft did not name the state-owned company making the purchase. A spokesman for the Russian government confirmed to Reuters that the state had made the deal, but also did not name the buyer. A Rosneft subsidiary will receive 9.6 percent of Rosneft’s equity capital in exchange for the assets, the company said.
Rosneft is subject to debt restrictions imposed in 2014 on the Russian energy sector, but its assets aren’t blocked. The company is 50.00000001 percent owned by Rosneftegaz, a state-owned Russian firm that serves as an intermediary between the government and oil and gas companies.
Major Russian media outlets speculated that Rosneftegaz bought Rosneft’s Venezuelan assets, citing the description of the purchasing company and the terms of the deal as laid out in the press release. Rosneftegaz reduced its stake in Rosneft by 9.6 percent as a result of the deal, meaning the state no longer controls the company on paper, a source told Reuters on Monday.
U.S. sanctions may have spurred the move: Two Rosneft subsidiaries based in Switzerland were recently designated by the U.S. for trading and brokering Venezuelan oil. Cargoes of Venezuelan crude were transferred to TNK Trading International S.A. (TTI) after the U.S. had designated Rosneft Trading S.A., the U.S. Treasury Department said earlier in March. Rosneft Trading was handling as much as 70 percent of Venezuela’s oil, Elliot Abrams, the U.S. State Department’s special representative for Venezuela, said in February.