political flag to gain power . It ’ s communist , and militarist model is funded by oil wealth that belongs to all Venezuelans . While PDVSA resources play a significant role in the Maduro revolution in Venezuela , Citgo Petroleum ( a subsidiary of PDV America a U . S . unit of PDVSA ) is used as his political instrument in the U . S . to buy political loyalty . PDVSA has owned Citgo since 1980 .
CASH FOR OIL
As the country ’ s economy deteriorates to the brink of collapse , Maduro desperately looks for cash to stay in power at all costs , and avoid debt default or a political coup . Billions of dollars are owed to Russia and China .
Many believe Maduro annulled the elected National Assembly to remove any obstacles in the way of gaining access to billions of dollars in loans from Russia ’ s state-owned Rosneft in exchange for Venezuelan oil to finance its revolution and bond payments . So , PDVSA placed ( 49.9 %) of its stake in Houston-based Citgo as a bond in exchange for $ 1.5 billion loan made by Rosneft .
There is a serious concern that if PDVSA cannot pay its debt on time , Rosneft could take over control Citgo and its refineries . All Rosneft would have to do is to buy PDVSA ’ s bonds to have more than 50 % ownership of the Houston-based Citgo . The company has annual revenues ( 2004 ) above $ 32 billion ($ 30 billion Euros ), a network of pipelines and terminal that runs through 24 states , and three U . S . refineries with a refining capacity of 749,000 barrels of crude per day . Citgo refineries are located in Texas , Louisiana , and Illinois .
U . S . Bi-Partisan Senators called on the Secretaries of State and Treasury to scrutinize the Rosneft ’ s deal with PDVSA since the Russian has a lot to gain through the PDVSA-Rosneft- Citgo asset transfer . The consummation of this deal would be detrimental to U . S . interests and national security .
The U . S . is committed to stand with the people of Venezuela which are suffering under this tyranny . On August 25 , 2017 , the U . S . Press Secretary announced financial sanctions signed by executive order on Venezuela . The sanctions prohibit financial institutions from providing new money to the Maduro dictatorship or state oil company PDVSA . It also restricts PDVSA ’ s U . S . subsidiary , Citgo , from sending dividend to Venezuela and prohibits dealings in two bonds owned by the Venezuelan public sector .
MOSCOW- CARACAS SEPARATE OIL DEAL
Maduro and Putin are discussing a separate oil deal that would allow Russia and Venezuela to evade additional U . S . sanctions . Under the new deal , Rosneft would exchange its collateral in Citgo for stakes in three other PDVSA oil fields in Venezuela , as well as two natural gas and fuel supply contracts , as reported by Reuters .
There is no doubt Russia is leveraging its position as Venezuela ’ s financier to gain more control over the OPEC nation ’ s crude reserves , the largest in the world . Also , Rosneft has placed itself as a trader of Venezuelan oil and resells about 225,000 barrels per day , 13 percent of Venezuela ’ s total production , which gives Russia a stronger position in energy markets across the U . S . and the Americas according to Reuters .
ARMS FOR OIL
According to Moscow , between 2005 and 2007 , Venezuela signed 12 contracts for weapons purchases from Russia for a total of more than $ 4.4 billion .
Maduro ’ s Venezuela and Putin ’ s Russia deep ties in energy and defense represent a threat to U . S . interests and the stability of the region .
THREAT TO THE WESTERN HEMISPHERE
Considering the Maduro dictatorship strategic alliances with North Korea , Iran , Syria , Cuba , China , and Russia , the Venezuelan conflict is a tragedy with serious implication for our Latin American neighbors , the U . S ., and the Western Hemisphere . The Trump administration has taken the first step to strengthen its relations with the countries in the area by demonstrating its commitment to work with their leadership to help rescue and sustain democracy , freedom , and security .
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