The socialist Maduro Regime should tilt in Venezuela could be Russia, one of the big losers. Russian lenders to make their loans. And the price of Oil on the world market could fall.
In Venezuela, a fight for Power between the Regime of Nicolás Maduro and the opposition majority is raging. Maduro has long been supported by the Kremlin. Against this Background, the question of what would mean a loss of long-time ally for Russia.
Investments of “Rosneft” is not in danger
All eyes are on the majority state-owned Russian Oil company Rosneft, whose Supervisory Board is chaired by former German Chancellor Gerhard Schröder. Rosneft is involved in five projects of the Venezuelan state Oil and gas company Petroleos de Venezuela SA (PDVSA). The Russian share in these projects are between 26 and 40 percent. What is the probability of losing these assets?
It appears doubtful that a new government would Maduro should be actually overthrown expropriate foreign investors, provided that the shares were legally, without corruption been purchased. So it could be that investors wanted to get rid of this week on the Moscow stock exchange the shares of Rosneft quickly, had a hasty acts.
Oil refinery of Venezuela’s state oil company PDVSA in Puerto La Cruz
According to data from the year 2017, Rosneft Venezuela has granted, in fact, a loan in the amount of six billion dollars. This credit is offset by the participation in the mentioned projects and Oil extracted. Recently, there were delivery delays, and Rosneft’s chief Executive Igor Sechin had to fly in November 2018 to Caracas. The credit agreement expires as early as 2019. The largest part of the amount borrowed, the Russian state is likely to have to get back to the group for a long time.
Loans for arms purchases helped Russian industry
More complicated it looks with the loans, the Russia-Venezuela has granted for the purchase of Russian weapons. Russian media reported that Moscow could have for this purpose in the past 20 years, around eleven billion US dollars in Caracas transferred. How much has been paid back, is not known. However, there are messages to be restructured according to the Venezuelan debt on favorable terms.
It is unclear whether a possible new Venezuelan government will have to pay back these loans. The Ukraine, for example, refuses until today, a Russian billion loan from the year 2013 to repay Russia for the support of the then Pro-Russian President Viktor Yanukovych. The money in Venezuela would not be lost for Russia; after all, it was for Kalashnikov machine guns, fighter jets, helicopters, tanks and other military equipment of the Russian production output, and thereby supporting the own industry.
Against the Maduro government: protests in Caracas
What could come to Moscow are really expensive
Overall, the Russian losses in the event of a power could amount to a change in Venezuela eleven billion dollars or a little more. But that would be nothing compared to the consequences, should Venezuela boost its Oil production sharply and Oil prices on the world market in the long term, press down. Venezuela is often described as the country with the world’s largest Oil reserves. However, around 20 years of socialist rule, first of all, Hugo Chávez, of Maduro, led to the decline of the Venezuelan Oil industry. The situation is so dramatic that Venezuela to the world oil market is today hardly plays a role.
Should in the event of a power Oil change to be led more efficiently, and the displaced Western, mainly US-American companies to return, it would boost oil exports. Future delivery contracts could be completed on a new base location, which could make the Oil on the world markets cheaper. That would be the real nightmare scenario for Moscow.