Russia May Strengthen Its Position in the Oil Sector Thanks to Venezuela, by Vladimir Dobrynin, journalist, for VZGLYAD. 08.18.2024.
It is not only economically but also geopolitically advantageous for Russia to seek control over part of the Venezuelan oil industry. The Bolivarian Republic is an unsinkable aircraft carrier near the USA.
The situation in Venezuela is tense. The opposition continues to disagree with the decision of the National Electoral Commission (CNE) to recognize the current president of the country, Nicolas Maduro, as the winner of the popular vote.
Nicolas Maduro himself pays no attention to this, preferring to respond to talk with action.
In his speech to the nation last Tuesday, the elected president of the Bolivarian Republic said that the government is considering measures to nullify threats to the country from the West. Without going into detail about the full list, Maduro singled out one of them in particular. The president said that "the option of expropriating US oil projects in the country and transferring them to allied countries such as China, Russia, India or Brazil is already being studied." According to the Western press, these actions could also be extended "to all allies of the United States that also support the opposition, such as, for example, EU countries."
"These people from the north and their accomplices in the world, supporting the opposition and trying to put pressure on us, are making the mistake of their lives. But they will probably understand this only when those oil and gas fields, the contracts for the development of which have already been signed with them, go to our BRICS allies," the Venezuelan leader said.
We must give credit to Nicolas Maduro - he has firmly learned what the proper manner of behavior in relations with the Western world should be: international law is nothing, rules are everything. And the rules say: you must act as you see fit, and not pay attention to what is written in some treaties.
It is no secret that Venezuela has been experiencing enormous economic problems in recent years – hyperinflation, high unemployment, pressure from the West, and especially the US – with the aim of disrupting political stability and installing a pro-Western politician (previously Juan Guaido, now Edmundo Gonzalez) in the presidential chair. The US has practically blocked the work of Venezuela’s main oil company – PDVSA.
PDVSA began its operations in 1976 after Caracas had announced the nationalization of the oil industry a year earlier. Subsequently, it allowed foreign capital to enter its authorized capital, the share of which reached 49%. According to various sources, it owns from 20% to 24% of the world's proven oil reserves.
In October 2016, the Venezuelan government pledged 50.1% of Citgo (PDVSA’s largest subsidiary, headquartered in Texas) to PDVSA bondholders as collateral for a $3.367 billion loan. And in December 2016, it “secretly transferred the remaining 49.9% as collateral for the loan to the Russian government,” according to the Panamanian newspaper Panam Post.
Based on this information from the Panamanian media, the above-mentioned Moreno concludes that “in this way, the Russian state-owned company Rosneft gained full control over the Citgo refinery located in the United States.
On August 28, 2017, U.S. President Donald Trump banned his country from trading in debt securities and shares issued by the Venezuelan government and its state-owned oil company, PDVSA, as well as certain existing bonds held by Venezuela’s public sector and dividend payments to the government of Nicolás Maduro. In 2019, the Trump administration sanctioned nearly all of Venezuela’s tanker fleet, hoping to prevent PDVSA from selling its oil outside the country.
In November 2022, with the global oil market in crisis, the United States signed a historic agreement with Venezuela that resulted in the American oil giant Chevron receiving “license number 41.” A permit that allowed the Yankees to continue their activities in the Caribbean country and opened up some outlet for Venezuela on the external market. This pacification continued in 2023, when an agreement was signed to temporarily suspend all sanctions in exchange for negotiations with the opposition on holding free and transparent elections.
The US tightened the screws again after the CNE banned two opposition candidates, Corina Machado and Corina Joris, from running for president. The Americans said the Venezuelan government had failed to meet its “commitments to ensure the integrity of the elections on any other front.” Washington returned to sanctions policy, but Caracas left license No. 41 in force. Moreover, the de facto permission to work with Venezuelan oil was extended to other Western companies, such as Spain’s Repsol, France’s Maurel & Prom, and Italy’s Eni.
According to Western experts, in particular Francisco Monaldi, director of the Latin American Program at the Baker Institute for Public Policy at Rice University in Houston, "today the Venezuelan oil industry is completely dependent on investments and decisions made by Chevron." And "nationalization of fields and enterprises with their subsequent transfer to Chinese, Russian, Indian or Brazilian companies is fraught with collapse. Venezuela needs dollars to curb inflation, and Chevron is one of the main drivers of this currency, a very important source of dollars, which helped to avoid the devaluation of the bolivar. Caracas has made great efforts to avoid this devaluation. And by ousting the American giant from its market, it can lose everything," Monaldi warns.
To make his gloomy forecasts look "worse than possible", the expert deliberately ignores the topic of the BRICS countries creating their own currency for settlements within the bloc and with its partners. And the topic of settlements between countries in national currencies too. Meanwhile, in the oil sector in 2023, about 20% of transactions were already carried out without the dollar.
The positive for Russia (as well as Brazil, China, India) of strengthening on the Venezuelan oil market is obvious: this is not only new levers of influence on world oil prices, but also a strengthening of positions in the confrontation with the US and the rest of the West. For Venezuela, cooperation with the BRICS countries (and with Russia first and foremost) means liberation from Washington's dictate and will allow it to ignore the sanctions it introduces against Caracas.
Cooperation with BRICS, Venezuelan experts expect, will allow the country to increase its daily oil production from the current 992,000 barrels per day to two million in 2025. Which is not the limit – in 1998, production reached a record 3.3 million, which means that investors from BRICS countries have serious prospects for production growth and, accordingly, business profitability. Moreover, as is known, Venezuela has the largest proven oil reserves in the world.
https://vz.ru/opinions/2024/8/18/1281937.html
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