Vladimir's Venezuela - Leveraging loans to Caracas, Moscow snaps up oil assets

[The_jackalope]

Source: Reuters

Caracas/Houston (Reuters) - Venezuela’s unraveling socialist government is increasingly turning to ally Russia for the cash and credit it needs to survive – and offering prized state-owned oil assets in return, sources familiar with the negotiations told Reuters.

As Caracas struggles to contain an economic meltdown and violent street protests, Moscow is using its position as Venezuela’s lender of last resort to gain more control over the OPEC nation’s crude reserves, the largest in the world.

Venezuela's state-owned oil firm, Petroleos de Venezuela (PDVSA), has been secretly negotiating since at least early this year with Russia's biggest state-owned oil company, Rosneft (ROSN.MM) - offering ownership interests in up to nine of Venezuela's most productive petroleum projects, according to a top Venezuelan government official and two industry sources familiar with the talks.

Moscow has substantial leverage in the negotiations: Cash from Russia and Rosneft has been crucial in helping the financially strapped government of Venezuelan President Nicolas Maduro avoid a sovereign debt default or a political coup.

Read more: https://www.reuters.com/article/us-venezuela-russia-oil-specialreport-idUSKBN1AR14U

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The fact that the US hasn't had a functioning State Department ever since Rexxon Tillerson was installed as SoS is paying major dividends for Russia. USA is hands-off Venezuela, while Rosneft is hands-on. Geopolitics at its finest...

[geek tragedy]

1. Venezuela is a money pit. They were barely solvent when oil prices were through the roof nt

[FLPanhandle]

2. Russia is a sucker if they do that deal

That government is doomed to collapse eventually so any loans will never be repaid and the oil rights will be voided by the next government.

Let the Russians throw away their cash.

[Dreamer Tatum]

5. The Russians will collect. That's the difference. nt

[DK504]

3. Vlady snapping up oil all over the world looks like he wants us to be

dependent on Russia for oil. Is there a better reason for renewables?

[Dreamer Tatum]

4. Hold the fuck on

For YEARS we've been chided that the US CAUSED this mess and we should keep our gringo mitts off of that cuddly little box of kittens.

Now we get "The fact that the US hasn't had a functioning State Department ever since Rexxon Tillerson was installed as SoS is paying major dividends for Russia. USA is hands-off Venezuela, while Rosneft is hands-on. Geopolitics at its finest..."

Please.

[The_jackalope]

6. I guess Russia wants Venezuelan oil more than the US does.

I've never been one of the chiders you referred to. Where geopolitical realpolitik is concerned, no nation is a cuddly little box of kittens. Except maybe Canada.

[FrodosNewPet]

16. Don't discount the ferocity of a Canadian scorned!

[Calista241]

13. If there's one thing that Rex Tillerson knows about, it's oil markets, assets, and leverage.

I'm comfortable with sitting this one out and watching Maduro fall from a distance. I'm sure we'll get blamed for it somehow though.

[DetlefK]

7. So, essentially now it's Venezuela's riches who get distributed to oligarchs.

When the Soviet Union was dissolved, the companies of Russia were sold for cents on the dollar to a few well-connected people. They became the oligarchs.

Now Venezuela's companies and ressources are sold for cents on the dollar to a few well-connected people.




I'm betting $10, in 5 years, when Venezuela's socialism is gone and the country's economy is in the hand of a few well-connected oligarchs, they will blame the US for their decision.

[LeftInTX]

8. I believe we haven't had diplomatic relations with Venezuela since W

If I'm not mistaken, this could have easily happened under Obama

[The_jackalope]

9. Actually, Obama restored relations.

From wikipedia:

Venezuela broke off diplomatic relations with the U.S. in September 2008 in solidarity with Bolivia after a U.S. ambassador was accused of cooperating with violent anti-government groups in that country, though relations were reestablished under President Barack Obama in June 2009. In February 2014, the Venezuelan government ordered three American diplomats to leave the country on charges of promoting violence.

[LeftInTX]

10. OK - Thx - nt

[Sunlei]

11. That move gives Russia a great shipping & Trade position in SA.

[Calista241]

12. If the Russians want to gamble on that shitshow of a government surviving, they're more than welcome

[House of Roberts]

15. Won't Russia move in on Venezuela

like they have in Syria? They will either prop up Maduro, or an equally pliable substitute to protect their interests.

[Calista241]

17. Russia deploying troops to South America is WAAAY different

Than Syria. Venezuela would face a whole lot of scrutiny from all of their neighbors in South America in addition to the US and North America if they were to invite the Russians in as an occupying force.

[Igel]

14. It was in January that Rosneft bought bonds for $5 billion, 49.5% of Citgo.

That's Venezuela.

Who knew that Obama installed Tillerson as SoS and he's a carry-over.

It's continued since then, of course. Why? Because Maduro basically thinks of the US as the Great Satan for purposes of his cult of xenophobia, and Putin has been a long-term ally and co-religionist.

Anybody remember when they invited the Russian navy? Many DUers pitched a fit. Some DUers glowed with joy. (We won't stop to compare names for those who considered Ukraine to be a "legitimate" place for Russian activities because it's in Russia's sphere of influence. That would make places like Venezuela "legitimately" in the US's sphere of influence.)

Here's RT's coverage: https://www.rt.com/news/russias-navy-in-venezuela-the-facts/

And to compare, Reuters: http://www.reuters.com/article/us-venezuela-russia-idUSN0633952420080907