Cash flow from Venezuelan oil sales are being funneled through Russian state-run oil giant Rosneft, helping the country’s president Nicolas Maduro to evade U.S. sanctions designed to oust him from power, Reuters reported on Thursday citing sources and documents.
Oil accounts for more than 90 percent of exports from the OPEC nation and the lion’s share of government revenues. Maduro has accused U.S. President Donald Trump of waging economic war against Venezuela.
Since January, Maduro’s administration has been in talks with allies in Moscow about ways to circumvent a ban on clients paying PDVSA in dollars, sources told Reuters. Russia has publicly said the U.S. sanctions are illegal and it would work with Venezuela to weather them.
Under the scheme uncovered by the news agency, Venezuelan state oil company PDVSA has started passing invoices from its oil sales to Rosneft.
The Russian energy giant pays PDVSA immediately at a discount to the sale price – avoiding the usual 30-to-90 day timeframe for completing oil transactions – and collects the full amount later from the buyer, according to the documents and sources.
Major energy companies such as India’s Reliance Industries Ltd – PDVSA’s largest cash-paying client – have been asked to participate in the scheme by paying Rosneft for Venezuelan oil, the documents show.
Rosneft, which has heavily invested in Venezuela under President Vladimir Putin, did not immediately respond to a request for comment.
Russia has loaned Venezuela almost $16 billion since 2006, which is being repaid in oil shipments and has also taken significant stakes in petroleum projects, meaning it already controls a large slice of the South American country’s production.
The sources said some of the money was flowing via Russian-Venezuelan bank Evrofinance Mosnarbank, which was placed under U.S. sanctions last month. A spokesperson for Evrofinance denied such transactions had passed through the bank.