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Russian companies in Venezuela are not experiencing any problems resulting from the escalation in the political situation in the country and have not incurred any losses on the oil they produce there, Russia’s Energy Minister Alexander Novak told news outlet Gazeta.ru in an interview.
“Our companies present there [in Venezuela] are following the situation very closely. To date, we have no information about any problems or losses. Work is going as usual,” Novak said.
Rosneft and Gazprom are among the foreign companies still present in Venezuela. Lukoil’s trading arm Litasco, however, exited the country as soon as the United States imposed the latest round of sanctions against the Maduro government, targeting specifically state oil company PDVSA.
“Litasco does not work with Venezuela. Before the restrictions were imposed, Litasco had operations to deliver oil products and to sell oil. There were swap operations. Today there are none, since the sanctions were imposed,” Lukoil’s Alekperov said at the Russian Investment Forum in the Black Sea resort of Sochi earlier this month.
Another Russian oil producer, Gazprom Neft, however, does not see major risks for its oil business in Venezuela, the company’s chief executive officer Alexander Dyukov said at the same event two weeks ago.
Russian and other companies, including U.S. Valery Energy and Chevron, operate in Venezuela via joint ventures with PDVSA. The heavy crude they produce, however, is sitting unsold as buyers shy away from the problematic commodity as Washington threatens sanctions.
Just yesterday Bloomberg reported there are more than eight million barrels of crude produced in Venezuela that is sitting in tankers offshore because onshore storage facilities are getting filled up and the crude is not being sold. What’s more, because of this excess supply, heavy crude upgraders are operating at reduced rates in the Orinoco Belt, including an upgrader operated by the Rosneft PDVSA joint venture there.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.