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Venezuela’s PDVSA Offers Rosneft Stake In Chevron-Held JV

Oil Rigs

Venezuela’s struggling state oil firm PDVSA has offered Russian oil giant Rosneft 10 percent of its 70-percent stake in a joint venture in which the other 30 percent is held by U.S. Chevron, Reuters reported on Thursday, citing five industry sources.

The oil company of troubled Venezuela – where a devastating economic crisis is causing daily food and medicine shortages for millions – has offered Rosneft 10 percent of the Petropiar joint venture in the extra-heavy crude area of the Orinoco Belt. Chevron holds a 30 percent interest in Petropiar, a non-operated joint venture with PDVSA.

The Venezuelan company’s offer was part of a bigger package of oil interests proposed to Rosneft, as PDVSA is trying to raise some much-needed cash to pay down part of its huge debts to providers and avoid defaulting on its bond payments, two of the sources told Reuters.

If Rosneft were to agree to a deal for the Petropiar stake, this would put it working together with Chevron. The U.S. company’s main concern is said to be that transparency laws and accounting practices are not as strict in Russia as they are in the U.S., a source close to the issue told Reuters.

Last year, Rosneft signed a deal with PDVSA to raise its stake in the Petromonagas joint venture to 40 percent from 16.7 percent.

Currently, Rosneft and PDVSA have joint interests in five upstream projects in Venezuela, three projects in production stage, one project at a pilot development stage, and one project at an exploration stage.

According to Reuters, the Russian company is said to have lent between $4 billion and $5 billion to PDVSA.

Related: Could Rosneft Take Control Of Citgo?

Opposition parties in Venezuela have been worried over Russia expanding its footprint in Venezuela, while Venezuela’s socialist President Nicolas Maduro has glorified closer ties between the two countries.

There has also been concern over the possibility that Rosneft could take control of 49.9 percent of Citgo – the troubled U.S. business of PDVSA, which had used the stake as collateral for a $1.5-billion loan provided by Rosneft last year.

By Tsvetana Paraskova for Oilprice.com

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