Six US senators expressed concern over Russian oil company Rosneft PJSC possibly taking control of Citgo Petroleum Corp. if its owner, Petroleos de Venezuela SA (PDVSA), defaults on two major financial obligations.
The 2016 transactions that PDVSA undertook with Rosneft—a debt swap for a 50.1% stake in the Tulsa-based refiner and marketer and a lien against 49.9% of Citgo that Rosneft Trading SA holds as security for a substantial loan to Venezuela’s national oil company—have created a significant risk that Rosneft will acquire a controlling stake in Citgo, the senators said in a June 19 letter.
“Serious questions have been raised regarding the national security risk of Rosneft—a company with close ties to [Russian President Vladimir V. Putin]—assuming control of US energy infrastructure,” Sens. Ronald L. Wyden (D-Ore.), Benjamin J. Cardin (D-Md.), Marco Rubio (R-Fla.), John Cornyn (R-Tex.), Richard Blumenthal (D-Conn.), and Ted Cruz (R-Tex.) told Sec. of State Rex W. Tillerson and Treasury Sec. Steven T. Mnuchin in their letter.
They said they welcomed Mnuchin’s commitment in testimony a week earlier before the Senate Banking Committee to ensure the Committee on Foreign Investment in the United States (CFIUS) reviews the transaction in case Rosneft is in a position to exercise its lien against Citgo in order to ensure that US security is not compromised.
“In addition, we request an explanation of the steps the Treasury Department is taking to examine whether Rosneft or related entities have already acquired control over shares in the company, as well as your views on how CFIUS review might apply to this transaction,” the senators said.
“We also request your views the application of US sanctions to this transaction and, in particular, whether current prohibitions on certain transactions would bar Rosneft from exercising the lien it acquired against Citgo,” they continued.
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