Venezuelan President Nicolas Maduro is moving cash from Venezuelan oil sales through Russian state energy giant Rosneft, as he looks to evade U.S. sanctions designed to oust him from power, according to sources and documents reviewed by Reuters.
The sales are the latest sign of Venezuela’s growing dependence on Russia, as the U.S. tightens sanctions on Maduro, Kallanish Energy learns.
With its economy hurting from years of recession and a sharp decline in crude oil production, Venezuela was already struggling to finance imports and government spending before Washington imposed tough restrictions on state oil company Pdvsa in January.
Oil accounts for more than 90% of exports from Venezuela and the majority share of government revenue.
Since January, Maduro’s administration has been in talks with Moscow about ways to bypass a ban on clients paying Pdvsa in dollars, the sources told Reuters.
Russia has publicly said the U.S. sanctions are illegal and it would work with Venezuela to weather them.
Under the plan uncovered by Reuters, Pdvsa has started moving invoices from its oil sales to Rosneft. The Russian energy giant pays Pdvsa immediately at a discount to the sale price, avoiding the usual 30-to-90 day timeframe for completing oil transactions and collects the full amount later from the buyer, according to the documents and sources.
“Pdvsa is delivering its accounts receivable to Rosneft,” a source at the Venezuelan state firm with knowledge of the deals, who spoke on condition of anonymity for fear of retaliation, told Reuters.
Major energy companies such as India’s Reliance Industries, Pdvsa’s largest cash-paying client, have been asked to participate in the plan by paying Rosneft for Venezuelan oil, the documents show.
Rosneft, which has heavily invested in Venezuela under President Vladimir Putin, did not immediately respond to a request for comment. Venezuela’s oil ministry, its information ministry, which handles media for the government, and Pdvsa did not respond to questions.
Asked about the transactions, a spokesperson for Reliance said it had made payments to Russian and Chinese companies for Venezuelan oil. The spokesperson said the payments were deducted from money owed by Venezuela to those countries, but did not provide further details.
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