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Russia Asks For Same Oil Deal Chevron Has In Venezuela

Russia has asked Venezuela’s state-run oil company for a deal very similar to the one Chevron has for controlling crude oil exports for its JV’s there, Reuters’ sources said anonymously on Tuesday.

Rosneft’s parent company, Roszarubezhneft, has asked Venezuela for a deal that would allow it to market the crude oil and fuel oil produced by its joint ventures in Venezuela, the sources said—this would be similar to the deal Chevron has struck with the South American oil company.

As it stands today, the crude oil from Roszarubezhneft’s joint ventures—of which there are five—is marketed and exported by PDVSA’s intermediaries and controlled by PDVSA. Those intermediaries get a chunk of the proceeds, and Russia is eager to take that chunk for itself. What’s more, Russia is eager to get paid at all for its crude oil. The JVs between Roszarubezhneft and PDVSA have accumulated about $3.2 billion that is now owed to it, through the sales that PDVSA is managing, Reuters sources said. On top of that, PDVSA owes Roszarubezhneft $1.4 billion from extended loans, although PDVSA is disputing that figure.

But granting Roszarubezhneft this right would mean revising some of Venezuela’s statutes, which say that PDVSA has control over crude oil and fuel sales and exports. Venezuela managed to skirt these statutes last year for Chevron, who now can market the crude oil from its JVs with PDVSA on its own, in lieu of payment for what PDVSA owes it.

If successful, Russia would have access to another crude oil revenue stream at a time when the Western world is looking to squeeze Ukraine’s invader to strip it of its finances.

Reuters sources suggested that this is not the first time Roszarubezhneft has made this request. Last year, Russia asked Venezuela for the ability to market its crude oil in Venezuela, but the request was denied. The debt Venezuela is accruing that is now due to Russia could make Venezuela more amenable to such an arrangement.

By Julianne Geiger for Oilprice.com

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