What lies behind the reshuffle with the exit of Rosneft from Venezuela
Last week, Rosneft announced the cessation of its activities in Venezuela and the sale of assets associated with this country.
Last Saturday it became known that Rosneft entered into an agreement with a company wholly owned by the government of the Russian Federation to sell shares in all Venezuelan projects, including oil production in the Petromonagas, Petroperija, Boqueron, Petromiranda and Petrovictoria enterprises, in oil refining and trading operations.
In exchange, Rosneft will receive 9,6% of its own shares from the state.
This operation caused a strong reaction among armchair experts and all-rounders, who made a hasty verdict, boiling down to the fact that: a) this is another feint by the authorities to nationalize losses, b) Russia has caved in under the pressure of American sanctions, c) this is a “drain” of our Latin American ally .
Meanwhile, information was published in the media according to which, instead of Rosneft, a new, completely state-owned company, Roszarubezhneft, to which all Venezuelan assets were transferred, will operate in Venezuela.
In addition, experts agreed that, by doing so, the Russian leadership removed Rosneft, a public joint-stock company with foreign capital, from under the sanctions pressure of Washington, which demanded that Rosneft abandon its work in Venezuela.
But this, as they say, lies on the surface. There are other, much more interesting reasons why the Venezuelan castling was carried out.
There is an opinion that the replacement of Rosneft with Roszarubezhneft in Venezuela should first of all be considered in the light of the impending K-virus depression in the global economy and the joint attempt of the United States and Saudi Arabia to force Russia to reduce oil production and, in general, to make room in the hydrocarbon market.
According to the latest data, the global oil market is expected to shrink by 18% in the near future. Moreover, both the United States and Saudi Arabia are ready to cling to their teeth for the right to stay afloat, sacrificing other players for this.
Currently, there is a sharp collapse in oil production in the United States. Companies squeezing oil out of shale are taking huge discounts just to sell the extracted “black gold.” For example, the seller of Wyoming Asphalt Sour oil, Mercuria Energy Group Ltd., returns 19 cents to the buyer for each barrel removed from storage. Other varieties performed slightly better: Wyoming Sweet fell to $3 per barrel, Canadian Western Select to $5,06, Oklahoma Sour to $5,75, Southern Green Canyon to $11,51.
One of the largest US companies involved in the pipeline transportation of energy resources, Plains All American Pipeline LP, is screaming for American oil workers to stop oil production, since there is simply nowhere to put it: storage facilities and pipelines are filled to capacity.
Ask: what is the point of trading oil at a loss? Yes, to avoid overpacking and at least somehow stay afloat until better times come.
Russia's share of the world oil pie is 11,2%. This is a very tasty piece that is worth fighting for.
Today the price of oil fluctuates at $25 dollars per barrel. The cheap barrel is also being dragged to the bottom by gas prices, which in Europe on the spot markets are still balancing at $100 dollars per thousand cubic meters. If our country is kicked out of the oil market, then for the domestic economy it will be tantamount to a disaster. The cherished dream of the Washington Regional Committee will come true: the Russian leadership will be forced to open the gold and foreign exchange reserves until they are completely depleted.
Squeezing Rosneft out of Venezuela, in the hope that the company, which has been under international sanctions for six years, will give up and sell off its share at bargain prices, and there is an attempt to cut off the Russian share of the world oil pie.
Representatives of the US State Department made it very clear: the reason for the pressure on Rosneft is “direct work in the Venezuelan oil sector,” and specifically, “the sale of local oil in circumvention of American sanctions.” At the same time, the “Obkomov members” shook us with lists of specific contracts, volumes and dates, which, however, was perceived by many as attempts to legitimize arbitrariness in international relations.
Voiced by the State Department’s position, US Special Representative for Venezuela Elliott Abrams floridly stated: in order to achieve the lifting of sanctions, Russian oil traders will have to not only “change their behavior,” but also take some “concrete and significant” steps to “maintain democratic order in Venezuela.”
Mr. Abrams did not reveal what exactly was needed to please Juan Guaido, but, presumably, he was hinting that our Maduros would be “leaked” and the American clown would get some money.
Moscow initially brushed aside the threats, estimating that losses in Venezuela would not exceed 1%, but a “surprise” for Russian oil workers came from where they were not expecting: their Chinese partners, who so love to talk from the rostrum about their own, suddenly began to refuse deals with Rosneft. unbending position in the confrontation with the United States.
The largest petrochemical company in the Middle Kingdom, Sinochem Corp, has announced its reluctance to continue cooperation not only with the blacklisted Rosneft subsidiaries, but also with any enterprises affiliated with it. And now this was a blow below the belt.
In essence, the Americans achieved their goal: Rosneft’s Venezuelan assets turned into toxic ones, causing only losses and a serious migraine.
In addition, India may well follow China’s example, consuming a lot of oil produced by Russian companies, and which, in the midst of a new crisis, does not at all seek to aggravate relations with the United States.
In general, something had to be decided urgently.
We already know what decision was made. It remains only to find out how correct and timely it was.
For the sake of the purity of the result, let us turn to the opinion of American experts.
The only thing worth mentioning is that the operation to replace the oil operator came as a clear surprise both to the Washington regional committee and to foreign observers who were already rubbing their sweaty hands in anticipation of the sale of Rosneft’s Venezuelan assets for next to nothing to Western energy companies.
Bloomberg Bureau Chief in Caracas Patricia Laya:
“This step, in fact, gives the Kremlin the opportunity for a new maneuver - after all, the assets have been transferred to the ownership of a structure completely controlled by the Russian government, which is not under US sanctions.”
Expert from the Baker Institute research center in the USA Francisco Monaldi:
“Rational decision. It protects Rosneft, important property in Venezuela, as well as the ability to continue to help Maduro if there is such a desire. Moreover, it could help Putin provide assistance to Rosneft during a difficult market situation. However, the details of the transaction are not fully known...”
But Andrew Weiss, vice president of the Carnegie Endowment for International Peace think tank, put it best, calling the Kremlin’s extra-Zuelan maneuver “an open signal from Putin and Sechin to the Trump administration,” so to speak, to stick their heads where the sun doesn’t look.
It is absolutely impossible to argue with Mr. Weiss, but let’s be diplomatic: the Venezuelan castling of Rosneft is an offer to the Americans to fulfill their promises and lift sanctions. First of all, with Rosneft Trading and TNK Trading.
America, turn on the valve!
The situation with the export of oil at the moment has become extremely interesting: American oil companies cannot export their own oil in large volumes outside the continent: the K-virus automatically turns any tankers into “plague barges”, which no European ship will accept without a long quarantine, Japanese, South Korean port.
But pipelines do not have this drawback. Well, whose proposal - to take a good sip of oil or gas - looks trouble-free?
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