Russian Oil Major Rosneft’s Decision to Sell Out Assets to Render a Dent in Venezuela Economy
Followed by Gazprom which is Russia based biggest state-owned entity, Rosneft is the second-largest state-controlled organization and third biggest in the country. Lately, the company has been gaining tremendous attention post its decision to cease all operations in Venezuela. The company has been long been acclaimed as the biggest and most vital oil-producing company.
However, latest reports by company spokespersons affirmed, on grounds of anonymity, that Rosneft is likely to shut down all its oil-based operations across South America. The decision is in alignment with its high-value transaction with a South American based company that has agreed to buy all assets of Rosneft. The decision is a severe threat to Venezuela’s already troubled economy and is also hinting at the rapid paradigm shift of the Kremlin tangent, thus having a direct bearing on the economy of this South American nation.
Rosneft has long been a significant ally to the Venezuelan economy, allowing the country to enjoy a flourishing oil industry and associated crude oil development. These dual forces have constantly enabled a constant cash flow, thereby ensuring a steady inflow of gasoline across the country.
This grave decision to sell out of Rosneft in Venezuela is closely influenced by certain sanctions brought down by the US which according to Rosneft sources have adversely affected the company’s assets and performance. The buyer of Rosneft’s Brazilian assets remains undisclosed as of now, however, sources have also affirmed the normal functioning of the company across Venezuela as company hierarchy and asset management are still not under the change radar. The development according to several industry experts and analysts suggests that Russia will continue to have a strong foothold in the South American nation despite the Russian company’s recent decision to sell out assets. Additionally, Russia is also expected to continue having a significant influence on the oil industry of the nation. However, the new buyer will certainly have no direct influence or vital investments towards oil trade in Venezuela.
Over the years, Rosneft has successfully established a strong economic background with soaring oil transaction agreements with APAC countries such as China. However, the newly established sanctions given by the US government at the background of rough trade relations between China and the US are believed to have spurred the desperate sellout decision as the sanctions were beginning to affect Rosneft’s financial assets adversely.