What Happened: The Venezuelan government is considering granting Russian oil giant Rosneft full control over state-owned energy company Petroleos de Venezuela (PDVSA), according to an Oct. 17 El Nacional report that cited unnamed industry sources. Caracas reportedly initiated the proposal to write off its Russian debt, while Moscow reacted positively to the initiative and sent several officials to Venezuela to assess the PDVSA's status.
Why It Matters: Neither the Russian nor the Venezuelan government has confirmed the reports, while Rosneft has dismissed them as rumors, but if confirmed, it would represent a significant increase in Moscow's influence over Venezuela's energy industry. However, a potential takeover could face considerable hurdles, including approval by the opposition-led National Assembly. In addition, the plan would widen Russia's exposure to U.S. secondary sanctions against Venezuela.
Background: The United States imposed sanctions against PDVSA in January 2019 amid rising pressure to oust the government of President Nicolas Maduro. Rosneft has been increasing its presence in Venezuela in recent years, becoming the leading sales and marketing force for PDVSA's oil exports.