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Venezuela’s state-held oil firm PDVSA has cut its outstanding debt to the largest Russian oil producer, Rosneft, to below US$1 billion, Russia’s oil giant, one of the few companies still dealing with Venezuela, said on Wednesday.
In its Q3 results presentation published today, Rosneft said that PDVSA’s debt as at September 30, 2019, had dropped to US$800 million, down from US$1.1 billion as at the end of the second quarter this year.
Rosneft has extended US$6 billion of loans to PDVSA, which needs to be fully redeemed through crude oil supplies by the end of this year.
Last year, Venezuela repaid US$2.3 billion of the loan it had received from Rosneft years ago, but the Latin American country still owed another US$2.3 billion, excluding interests, Rosneft said in its 2018 results release in February this year.
Last month, reports emerged that the Venezuelan government is readying to hand over control over PDVSA to Rosneft, supposedly discussed as a way of erasing Caracas’ debt to Moscow. A close aide to Nicolas Maduro was quick to dismiss the reports.
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Later in October, Elliott Abrams, U.S. Special Representative for Venezuela, told the Financial Times that Russia’s Rosneft is “really central to the regime’s survival,” because it buys the oil Venezuela produces and helps it to sell the oil and arrange the financing. The U.S. Administration is thinking about slapping sanctions on Rosneft, but it hasn’t done it yet, as it is looking at a broader context in its relations with Russia, Abrams told FT.
The interview drew a reaction from Rosneft, which said in a statement that the U.S. is hypocritical in its selective sanctions and sanction waivers against Venezuela as it grants American and pro-American companies extensions of licenses to operate in Venezuela.
“Thus, USA officials demonstrate hypocrisy by selectively - in violation of international law - granting advantages to “their” companies to the detriment of competitors,” Rosneft said last week.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.