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Washington ready to block potential Russian takeover of U.S. oil firm

01 September 2017 14:41 (UTC +04:00)

The Trump administration is ready to block a Russian state-owned oil giant from gaining control of critical energy assets in the U.S. owned by Venezuela, senior American officials say, a move that likely would feed tensions between Washington and Moscow, the Wall Street Journal reported.

Petroleos de Venezuela SA offered Russia’s Rosneft nearly half of the shares of its U.S.-based subsidiary Citgo Petroleum Corp. as collateral for U.S. $1.5 billion in loans the Russian firm made in 2016 to help prop up cash-starved PdVSA and its owner, the Venezuelan government.

The planned move comes after some U.S. lawmakers, worried the Russian oil company could gain a controlling interest in a company that represents roughly 5% of U.S. crude-oil refining capacity, urged the Trump administration in June to use powers granted under national security laws to prevent the deal from happening.

Besides arranging interests in major oil-producing operations in Venezuela, President Nicolas Maduro’s government has also promised future crude deliveries as collateral and interest payments, the two people said.