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Rosneft does not see problems with Venezuela's PDVSA debt servicing

February 28, 20:46 UTC+3 MOSCOW

Rosneft is currently implementing several oil and gas exploration and production projects in Venezuela jointly with PDVSA

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MOSCOW, February 28. /TASS/. Rosneft does not see problems with debt servicing by the Venezuelan state oil and gas corporation PDVSA and views shares of the US-based Citgo as a first-grade pledge, press secretary of the Russian oil producer Mikhail Leontyev told TASS on Wednesday.

"We do not see any problems with [PDVSA] debt servicing; we told about that. We have viewed and continue viewing Citgo as the first-grade pledge. It never interested us from the standpoint of an operating asset; we did not intend to manage it," Leontyev said.

The press secretary made no comment on mass media reports that the Swiss coal trader Mercuria requested an authorization from the US Treasury Department to buy out PDVSA debt to Rosneft. According to Reuters, the US investors sent a relevant query to the US Treasury in order to prevent the transfer of the controlling stake in Citgo to the Russian company. Such a scenario is possible if PDVSA defaults on its obligations.

In November 2016, Rosneft received rights of pledge to 49.9% of shares in Citgo as a security under the $1.5 bln loan extended to Venezuela in 2016. Citgo Petroleum is the US division of PDVSA that controls refineries, pipelines and terminals in the United States. If PDVSA defaults on obligations, Rosneft may obtain control over Citgo, which owns three refineries, pipelines, oil product storage terminals and a retail sites chain in the United States.

According to Financial Times, Mercuria intends to fully buy out the debt in order to transfer it to other investors later on.

Rosneft is currently implementing several oil and gas exploration and production projects in Venezuela jointly with PDVSA.

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