Russian Oil Company Roszarubezhneft Seeks Control of Venezuelan Oil Exports Amid US Sanctions

Russian oil company Roszarubezhneft is seeking permission from Venezuela's state-run company PDVSA to control exports from their joint ventures, akin to a deal PDVSA struck with U.S. oil producer Chevron Corp CVX last year.

This proposal faces significant obstacles as it would require changes to Venezuelan law governing its oil exports.

The intent is to revive the cash flow from the five companies that U.S. sanctions have negatively impacted.

Roszarubezhneft's five joint ventures currently rely on PDVSA-designated intermediaries who take a substantial portion of the revenues for their services.

Also Read: Chevron's Defenses Stand Strong Amidst Volatile Market Dynamics: JP Morgan Analyst.

The joint ventures are owed around $3.2 billion from sales managed by PDVSA, Reuters reported. PDVSA also owes Roszarubezhneft approximately $1.4 billion from previously extended loans, which PDVSA is disputing.

If Roszarubezhneft's request is approved, it could provide Russia with additional cash flow, particularly as Western sanctions related to the war in Ukraine have heavily affected its oil revenues.

It could also aid PDVSA in achieving its goal of increasing Venezuela's oil output by 40% this year.

Roszarubezhneft's similar proposal to PDVSA last year was ignored.

The current request might not be granted if export proceeds are solely used for debt repayment, as PDVSA and the oil ministry also focus on generating cash flows.

Roszarubezhneft took over the stakes in the joint ventures from Rosneft in 2020, following U.S. sanctions on two Rosneft trading arms for alleged involvement in the sale of Venezuelan crude, which Rosneft denied.

Price Action: CVX shares closed at $153.53 on Tuesday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.