How Russia has invested billions of dollars in Venezuela, knowing that they were wasted

The Venezuelan crisis frightens even the most optimistic investors. But not to the closer allies of Nicolás Maduro's regime. The Russian company Rosneftwho has several agreements with PDVSA, at continued to spend millions of dollars in Venezuela even knowing that they would go to the loss, according to the documents obtained by the agency Reuters this shows the political link that unites the two oil companies to support Chavismo in power.

The directors of Rosneft, a company partly controlled by the Kremlin, launched at the end of 2015 the alarm signal concerning the decision to continue investing in Venezuela. An internal audit shows the discontent of a leader because of the lack of progress in the Ask PDVSA to explain the $ 700 million hole in a balance sheet. "It will be like that for all eternity", commented frustrated in an email to a colleague.

Memoranda, forms and official letters covering the period from 2012 to 2015 show the direction of the Russian company compared to its Venezuelan counterpart, at a time when large international companies were already leaving the country or ceasing new investment. In contrast, Rosneft has increased its stake with more loans and joint projects.

According to the public and internal reports of the company, has invested nearly 9,000 million USD since 2010. Part of Venezuelan debt with Russia is repaid in the form of hydrocarbons. Officially, there are advances for oil and fuel supply contracts, but many experts consider that it is about direct financial support to the government of Caracas.

"Payments strictly follow the schedule," said Rosneft vice president Pavel Fedorov during a conference call in February. "There will be no delay," he said. Rosneft badured investors that Venezuela had returned $ 2.3 billion out of the $ 4,600 million (interest-free) that the Russian oil company had lent to it in the form of advances.

The Russian group has minority interests in four PDVSA oil projects and owns several gas plants in the country of South America.

In the light, Russia is the second creditor of Venezuela, behind China. And both, with Cuba, are the main international supporters of the Chavez regime, unlike more than 50 countries that recognize Juan Guaidó as president.

Meanwhile, oil production in Venezuela shows no recovery against Russian investments. On the contrary, it is at historic lows. In 2018, the Organization of the Petroleum Exporting Countries (OPEC) estimated that it had decreased by 37% over the previous year, to stand at 1.17 million. barrels a day. lowest level of the last 30 years.

Rosneft's internal documents also reveal that the joint projects have extremely disappointing results and also facing logistical problems, as the lack of basic drilling equipment.

In addition, dissatisfaction with the "social projects" in which PDVSA has spent several million dollars in remote villages of a few hundred inhabitants.

Between two sources of the firm consulted by Reuters and two others who know the details of the contracts, the The only reason the company continued to provide support despite the economic downturn is the political motivation. The Kremlin expects Rosfnet to agree to support its ally.

"From the beginning, it was a purely political project. We all had to contribute"admitted an officer of a Russian oil company badociated with Rosneft in Venezuela.

The Russian oil company is led by a very influential close badociate of Vladimir Putin, Igor Sechin, which applies the geopolitical priorities of Russia to society, as in the case of Venezuela, despite the doubts of investors. Both Sechin and Rosneft are subject to Western sanctions against Russia for the crisis in Ukraine.

Taking advantage of the rise in hydrocarbon prices, the group obtained in 2018 a net profit of 549 billion rubles, or about 7,300 million euros at the current rate, 2.5 times more than the year. former.

(With information from Reuters and AFP)