Venezuela needs cash, and Russia has it. Venezuela has oil, and Russia wants it. According to a special report at Reuters, the socialist meltdown in Venezuela is likely to end with Moscow controlling a good deal of that tormented country’s most valuable asset: its oil fields.
According to Reuters, Russia’s giant state-owned oil company Rosneft has been holding secret negotiations with its opposite number in Venezuela, PDVSA, to purchase “ownership interests in up to nine of Venezuela’s most productive petroleum projects.”
The number of Venezuela projects Russia would have substantial or ownership stakes in would jump from five to 14 if these deals go through. The new acquisitions would include projects in some of Venezuela’s richest oil and natural gas fields.
The article goes on to note that Rosneft has already floated a billion dollars to PDVSA for promised future oil shipments, and the regime of socialist dictator Nicolas Maduro used Russian money to avoid defaulting on bonds at least twice. Russia announced one of these seemingly risky advance payments immediately after the United States announced a new round of sanctions against Maduro at the beginning of August.
Barron’s explains that Russia’s advance payments for Venezuelan crude are essentially a stealth strategy for buying the oil fields themselves. Russia writes huge checks for barrels of oil, Venezuela is unable to deliver the product or pay the debt, and Russia swaps the debt for equity in the oil projects. READ MORE
