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Is Russia Trying To Take Over America's Energy Infrastructure - Foreign Policy PDF
Is Russia Trying To Take Over America's Energy Infrastructure - Foreign Policy PDF
|ForeignPolicy
Russia might be able to snap up a piece of Americas energy infrastructure thanks to Venezuelas economic
meltdown.
It all starts with PdVSA, Venezuelas state-owned oil company. PdVSA owns CITGO, an oil rener in the United
States. And PdVSA last year put up about half of CITGO as collateral for a $1.5 billion loan from Rosneft, the
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PdVSA, like pretty much everything else in Venezuela, is broke, and is having trouble meeting its bond payments.
(The market gures it has a better than 50-50 chance of defaulting in the next year.) If it defaults on the loan, the
Russian state would have 49.9 percent of the U.S. rener and could grab outright control, if, as many suspect,
That has lawmakers from both parties and energy experts worried.
Sens. Bob Menendez (D.-N.J.) and Marco Rubio (R.-Fla.) sent a bipartisan letter to Treasury Secretary Steve
Mnuchin, who chairs the Committee on Foreign Investment in the United States, or CFIUS, which examines
foreign investments to see if they have any national-security implications for the United States.
This could leave Rosneft, a Russian company controlled by oligarchs with close ties to Vladimir Putin, in control
We are extremely concerned that Rosnefts control of a major U.S. energy supplier could pose a grave threat to
American energy security, impact the ow and price of gasoline for American consumers, and expose critical U.S.
CITGO operates 48 petroleum product terminals in 20 states, three reneries, three fully-owned Texas pipelines,
and six partially-owned pipelines. It produces about 750,000 barrels per day of rened products like gasoline. Its
been wholly-owned by the Venezuelan state since 1990, and despite plenty of tensions between Washington and
Caracas, has never been a Trojan horse inside the U.S. energy system.
Still, the possible Russian connection has spooked a Washington that is on high alert for signs of further Russian
meddling in the United States, after last years successful attempt to interfere in the election to boost Donald
Trumps chances.
Right now, Rosneft (and its boss Igor Sechin) are still under U.S. sanctions for Russias annexation of Crimea, so it
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But Rosneft made the risky loan last November expecting that sanctions at some point would be lifted, said
Jennifer Harris, an energy expert at the Council on Foreign Relations. Rex Tillerson, formerly head of
ExxonMobil and now U.S. Secretary of State, spent years lobbying Washington to ease sanctions on Russia, where
Exxon did business, and President Donald Trump campaigned on restoring closer ties with Moscow.
If sanctions are lifted, and if the Venezuelans default at some point as the market expects, Rosneft could be gifted
control of the U.S. rener on the cheap. (CITGO was estimated to be worth between $8 billion and $11 billion when
it was on the block a few years ago.) CITGOs new owners could alter renery production or limit distribution of
products like gasoline or they could operate it as a normal company focused on the bottom line.
That gives Moscow passive leverage, she said. We could wake up tomorrow if this deal goes through and
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