Russia sets up new oil company to potentially take over operations in Venezuela

A company specializing in the production and transportation of oil and gas has been set up in Russia, according to the state registry data. The new firm could take over projects in Venezuela after Rosneft sold its assets there.

Roszarubezhneft, which is owned by the Federal Agency for Government Property Management, will have an authorized capital of 322.7 billion rubles (over $4 billion). 

The company was registered in Moscow on March 28, after Russia’s oil major Rosneft announced the sale of its assets in Venezuela. On Saturday, Rosneft signed an agreement with the newly established government-run company on selling its shares and on the cessation of its participation in all projects in Venezuela (including its stock in Petromonagas, Petroperija, Boqueron, Petromiranda and Petrovictoria). Under the agreement, the oil giant will receive 9.6 percent of shares in Roszarubezhneft.

In February, the US slapped sanctions on a Rosneft subsidiary over its trade ties with Venezuela. The Russian company slammed those sanctions as illegal and groundless, pointing out that all of its operations in Venezuela were fully compliant with international law. It has explained that it had been investing in the Venezuelan oil and gas sectors long before the US sanctions were rolled out.

READ MORE: Trump threatens to slap 'very serious' sanctions on buyers of Venezuelan crude

Venezuela’s state energy firm PDVSA has also condemned the US sanctions and accuses Washington of attempting to create unfair competition to attain an advantage in the oil market.

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