Russia’s Oil Giant Rosneft Quits All Venezuelan Operations

Russia’s largest oil producer, Rosneft, confirmed on Friday that it had discontinued all operations in Venezuela, including in joint ventures, trading, and oilfield services, as the top Russian firm looks to avoid further U.S. sanctions because of its business with Venezuela.

At the end of March, Rosneft said it would be selling all its assets in Venezuela and was said to have canceled oil cargoes from the South American country after the United States hit Rosneft subsidiaries with sanctions due to their continued business with Venezuela.

Rosneft announced the sale of its Venezuelan assets to a company 100-percent owned by the Russian government.  

Earlier this year, the United States slapped sanctions on Rosneft’s Swiss-based trading arm as part of its attempts to cut off all revenue streams to Nicolas Maduro’s government in Caracas. The U.S. has signaled that it is ready to tighten even more the noose around the Venezuelan government. 

Commenting on Rosneft’s Q1 performance, chief executive officer Igor Sechin said on Friday:

“In second quarter of 2020, the Company closed a previously announced transaction to transfer to a company that is 100 % owned by the Government of the Russian Federation all assets in Venezuela, including participation shares in projects of Petromonagas, Petroperija, Boqueron, Petromiranda and Petrovictoria, as well as oilfield service companies and trading operations.” 

Rosneft’s operations in Venezuela “have been completely discontinued,” Sechin said. 

Meanwhile, Russia’s top oil producer reported a net loss of US$2 billion for the first quarter of 2020, due to the low oil prices and the depreciation of the Russian ruble. The Q1 loss compares to a net profit of US$1.9 billion for the first quarter of 2019.

Liquids production fell by 2.2 percent year on year to 4.64 million bpd in Q1 2020, “due to continued compliance with OPEC+ Agreement constraints,” Rosneft said.  

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:

• Goldman Sachs: Oil Market Headed For Deficit In June
  
• Oil Spikes Despite Pandemic Uncertainty
  
• How Accurate Are EIA And API Inventory Reports?