(Bloomberg) — Russian oil giant Rosneft PJSC sold its assets in Venezuela to the Russian government, in what may be a maneuver to avoid any U.S. sanctions in an escalating fight between Caracas, Washington and Moscow.
Rosneft is selling local production, service and trading assets to a state-owned company, it said in a statement. The move is to protect shareholders’ interests, according to a company spokesman.
The U.S. slapped sanctions on a unit of Rosneft in February for operating in Venezuela, stopping short of sanctioning the listed parent company. President Donald Trump is trying to oust Venezuelan President Nicolas Maduro, who is clinging to power in the oil-rich but increasingly impoverished nation.
The fight over Venezuela fits into a much larger geopolitical battle between Trump and Vladimir Putin, with both turning to oil as the weapon of choice. Russia’s decision to all but abandon the OPEC+ alliance earlier this month was seen as part of its strategy to weaken the U.S. shale industry.
That move prompted Saudi Arabia to launch a price war, which has pushed crude to about $20 a barrel, threatening U.S. shale producers, as well as the budgets of oil-producing states.
It was unclear from Rosneft’s statement what will happen to the business in Venezuela, and the Kremlin didn’t reply to a request for comment.
But Russia’s ambassador to Venezuela, Sergey Melik-Magdasarov, indicated on Twitter that the new owners would continue business as usual.
“Don’t worry! This is about Rosneft’s assets being transferred to Russia’s government directly. We keep moving forward together!,” he said, in a message that also posted on the embassy website.
The assets include Rosneft’s stakes in local upstream companies Petromonagas, Petroperija, Boqueron, Petromiranda and Petrovictoria, as well as oil-service, commercial and trading units.
The Russian Federation controls Rosneft with just over 50% of its shares, while BP Plc is the second-largest shareholder with 19.75%, and Qatar’s QH Oil Investments owns 18.93%.
Rosneft has said its oil trading operations in Venezuela are linked to the oil supply deals it reached with the state-owned PDVSA before the U.S. introduced wide-scale penalties for companies and individuals operating in Venezuela’s oil sector in early 2019.
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