(PDVSA left and Rosneft right source: actualidad rt.com)
On January 28, the Trump administration imposed sanctions to Venezuela's state-owned oil conglomerate, Petroleos de Venezuela SA (PDVSA). Citgo Petroleum, PDVSA's US subsidiary, can continue its operations, however, Citgo's funds will remain blocked in the US ,and PDVSA will be unable to remit them.
The Russian Minister of Energy Alexander Novak termed the US sanctions on PDVSA illegal. "We believe that the sanctions that were imposed are illegal and violate international law… As for Venezuela, it is not yet possible to say what the consequences in terms of production will be for the republic," Novak stated.
Russian Presidential Spokesperson Dmitry Peskov also criticized the sanctions. "We do not consider this to be right; we consider it most often to be the manifestations of unfair competition. In this case, this is a continued policy of undisguised interference in the internal affairs of Venezuela," Peskov said.
Venezuela's Ambassador to Russia Carlos Rafael Faria Tortosa also commented: "What has been done is robbery… They [the US] froze the accounts and also the transactions of PDVSA. We have a large enterprise in Houston, in the United States, this is Citgo. In America, there are more than 10,000 gasoline stations, and all this has been a source of revenue for our state, but they have frozen all this. We will embark on litigation in international courts over these crimes."
Over the years, Russia has heavily invested in Venezuela, and Rosneft, Russia's largest crude producer, issued large loans to PDVSA.
It was reported that PDVSA repaid $500 million in debts during the third quarter of 2018, with obligations totaling $3.1 billion at the time. Rosneft also holds a 49.9 percent stake in Citgo in return for a 2016 loan of about $1.5 billion.
PDVSA and Rosneft are also involved in the following joint projects in Venezuela:
Junin 6: PDVSA holds a 60 percent stake, the remaining 40 percent is controlled by a joint venture of Rosneft and Gazpromneft, a subsidiary of Gazprom. Rosneft holds 80 percent in that joint venture, Gazpromneft controls 20 percent.
Petromonagas: Rosneft owns 40 percent.
Petroperija: Rosneft owns 40 percent.
Petrovictoria: Rosneft owns 40 percent.
Petromiranda: Rosneft owns 32 percent.
Boqueron: Rosneft owns 26.67 percent.
On the radio station Ekho Moskvy, Russian journalist Matvey Ganapolsky commented that Igor Sechin, head of Rosneft and one of Russian President Vladimir Putin's closest allies, will be in trouble once the Maduro regime is overthrown, because the current opposition will conduct investigations on Russian interference in Venezeula's affairs. "I'm afraid Sechin will face certain troubles, because it was Sechin, who pushed, initiated and punched hard etc. to possess a faraway country with the precarious Maduro regime. (Venezuela) is a country with the highest oil potential (in the world). Sechin wanted to get that country for his full disposal. That was supposed to become a Russian foreign pump for getting money for budgetary and non-budgetary purposes".
As far as Venezuela's sovereign debt is concerned, Russia fears that Venezuela will default on its state debt to Moscow surpassing $3 billion.
Russia's Deputy Finance Minister Sergei Storchak commented that Venezuela will face difficulties in servicing the debt. "Probably there will be problems. All depends on the army, the military, how dutiful they will be," Storchak said.
He also added that the next payment of over $100 million is planned for the end of March. "Payments are made in September and March. There have been no overdue payments," Storchak stated.
The Russian Finance Ministry added in a statement that the agreement on restructuring Venezuela's debt to Russia remained unaltered. "There is an agreement between Russia and Venezuela on restructuring Venezuela's debt that stipulates the terms and the payment schedule. The next payment is due at the end of March. Russia's Finance Ministry expects payments as scheduled. There have been no changes made in the agreement, Venezuela has to fulfill obligations to the creditor it has assumed," the statement noted.
Concerning the Venezuelan oil, the influential Russian blogger El Murid (Anatoly Nesmeyan) noted that maintaining high oil prices would benefit not only the US in the external markets, but also Russia, since China will be forced to increase its oil purchases elsewhere. However, El Murid emphasized that Russia's behavior is not pragmatic, because Moscow refuses to cooperate with the US even if this means acting against its own interests.
Below is El-Murid's article:
The Fact That Rosneft Has Got Itself Into Venezuela Emphasizes The Complete Strategic Ineptness Of Our Top Managers
"The oil aspect of the events in Venezuela, is definitely important; it seems to be the determining factor as far as the economic interests of the United States are concerned. And so we need to understand what these interests are exactly in terms of oil, hydrocarbons and the energy sector as a whole.
"The United States interest is fully obvious – creating a maximum surplus of energy resources in its domestic market, which, of course, will ensure low energy prices and competitive advantages for the American economy over others. The shale revolution fully lends itself to this strategy. With regards to external markets, however, the U.S. interest is exactly the opposite – the U.S. is interested in higher existing prices for oil there, both from the perspective of its own producers and in order to weaken the competitive capabilities of rival economies.
"In this sense, the United States views Venezuela's oil as its own, which is in fact quite logical – due to its specific nature, its principal market is the United States, and it is from the United States that Venezuela receives a significant part of ingredients it needs for the processing of its highly bituminous oil of the Orinoco Belt. Similarly, the United States considers Canada's Alberta oil sands oil as essentially its own. In reality, the oil industry in North and Central America is a highly integrated chain, technologically connected into a single industrial processing complex.
"Undoubtedly, China's interest in Venezuelan oil disturbs the United States, as it undermines its strategy of glutting the domestic market and its general guiding principle - closing their own market and maintaining restrictions on the external [market]. The paradox here is that this position is a perfect match for the Kremlin ruling brotherhood's selfish interests: America is directly interested in maintaining high oil prices on external markets while closing its own market.
"This completely corresponds to the interests of the Russian kleptocracy, which is busy in a wholesale selloff of the country's natural resources and is directly interested in high (at least relatively high) oil prices. However, the dimwitted adventurists sitting in the Kremlin are incapable of working in concert with the Americans, even in this particular case where their interests coincide to the nth decimal point. The prevailing principle is to reject whatever the U.S. is doing and do the opposite (even when it defies common sense and goes against our own interests.)
"That is to say, to cut off your nose to spite your face.
"As a matter of principle, a country's national interests cannot be considered from the perspective of someone else's interests. The benchmark of policy is one's own interests. If they coincide with the Americans' interests - we will cooperate. If not - we will compete. However, a cornered rat strategy (or that of a besieged fortress) does not allow for such an approach. Everything is far more primitive and dumb.
"The U.S. is interested in weaning China off Venezuelan oil. The reasons are many, but the result is the same. Does that play into the hands of Russian kleptocrats? Oddly enough, yes - China will be forced to increase its oil purchases from other sources. The fact that Rosneft has got itself into Venezuela and, contrary to any common sense, keeps it afloat, only emphasizes the complete strategic ineptness of our top managers.
"They seem to be fiercely attached to Chinese interests, to the point of becoming either a target or a tool for the Chinese politicians. By the way, the Chinese have significantly reduced their investments in Venezuela in recent years – but instead of Chinese money, the Kremlin helpfully began injecting its own money. That is why the question of the Russian policies' objectivity does not appear somewhat strange - in the case of Venezuela, Chinese interests are well looked after, whereas the Russian ones - not so much."
 See MEMRI Special Dispatch No. 6926, Russia To Become Second-Largest Foreign Owner Of U.S. Domestic Refineries, If Venezuela Defaults, May 16, 2017.
 Tass.com, January 30, 2019.
 Tass.com, January 29, 2019.
 Tass.com, January 31, 2019.
 Reuters.com, January 24, 2019.
 Reuters.com, January 24, 2019.
 Youtube.com/watch?v=8MJzJASYkBE, January 27, 2019.
 Tass.com, January 29, 2019.
 Tass.com, January 29, 2019.
 El-murid.livejournal.com, February 4, 2019.