February 19, 2020 / 12:52 PM / 6 months ago

Top Indian buyer of Venezuelan oil gauging impact of U.S. sanctions on Rosneft unit

NEW DELHI (Reuters) - India’s Reliance Industries Ltd, a key buyer of Venezuelan oil, said it was assessing the impact of the latest U.S. sanctions on Rosneft Trading SA (RTSA), the Geneva-based trading unit of Rosneft that supplies oil to the private refiner.

FILE PHOTO: A sculpture is seen outside a building of Venezuela's state oil company PDVSA in Caracas, Venezuela June 14, 2016. REUTERS/Ivan Alvarado/File Photo

U.S. President Donald Trump on Tuesday imposed sanctions on the trading arm of Russian oil major Rosneft, which has been the largest intermediary of Venezuelan oil, as Washington targeted Moscow over its backing of Venezuelan President Nicolas Maduro’s government.

“Reliance will continue its direct communications with the U.S. Government to ensure that Reliance’s purchases of Venezuelan oil after the RTSA sanctions are both compliant with U.S. sanctions and consistent with U.S. policies regarding Venezuelan oil sector,” the Indian refiner said in a statement.

Apart from Reliance, India’s Nayara Energy, part-owned by Rosneft, also imports Venezuelan oil.

Rosneft accepts oil from Venezuelan state oil company PDVSA as payment for billions of dollars in loans extended to Venezuela over the past decade and then ships the barrels onto refineries that used to buy directly from Venezuela, including Nayara’s facilities.

“In its dealings with Rosneft and otherwise, Reliance will continue to act in compliance with U.S. sanctions and policy guidelines,” the company said.

Reliance, the operator of the world’s biggest refining complex, said its purchases of Venezuela crude oil are reported to and permitted by the U.S. government.

“We have been in continuous communications with the U.S. Department of State and the Office of Foreign Assets Control at the U.S. Department of Treasury,” Reliance said.

Both Nayara and Reliance are long-time customers of PDVSA as the two refiners are capable of processing the type of heavy sour crude that the OPEC member sells.

In 2019 Reliance’s import of Venezuelan oil fell 15% to about 230,000 barrels per day (bpd), while that of Nayara Energy rose 55% to about 107,500 bpd, according to tanker arrival data obtained by Reuters.

Nayara Energy said in a statement it complies with all relevant and applicable U.S. sanctions and “we reaffirm our commitment to this position following the recent announcements.”

Reporting by Nidhi Verma; Editing by Edmund Blair and David Evans

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