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US sanctions on Venezuela: Reliance says it is not breaking rules

PW Bureau

The statement was released to dismiss reports that had suggested that the conglomerate was involved in an arrangement that leads to cash payment for oil supplies to PDVSA via third parties New Delhi: Reliance Industries cleared the air on Saturday when it denied categorically that it was violating US sanctions against Venezuela and said that it had been purchasing crude oil originating from the Latin American nation from companies such as Russia’s Rosneft in full knowledge of US authorities. The official statement was released by Reliance to dismiss reports that had suggested that the conglomerate was involved in an arrangement that leads to cash payment for oil supplies to Venezuelan national oil company PDVSA via third parties.

‘Reliance informed US of specific volumes and transactions’

“Reliance has purchased Venezuelan crude oil from companies such as (Russia’s) Rosneft long before the imposition of the US sanctions, as they do get title to Venezuelan oil in return for reduction in their prior debt. Since sanctions were imposed, Reliance has made such purchases with the full knowledge and approval of the US Department of State (USDOS), and Reliance has informed USDOS of specific volumes and transactions. Such transactions do not lead to any consequent payment to PDVSA and do not violate US sanctions or policies,” the statement said.

‘Payments settled in cash or via product supply’

Reliance also said that the price agreement with such sellers is at market price and payments were settled only in cash or via supply of products bilaterally between Reliance and other sellers. “It is false to suggest that Reliance would be settling such shipments via Rosneft to PDVSA. In these transactions, PDVSA is only the original physical supplier, as the crude oil originates in its export facilities,” the statement said.

The backdrop

The statement comes a month after Reliance said that it had stopped all oil exports to US sanctions-hit Venezuela and has also suspended sales until sanctions are lifted. Two of Reliance’s refineries at Jamnagar in Gujarat used to be major importers of Venezuelan crude oil. However, the refineries have cut down crude purchases by about a third. The US imposed sanctions on Venezuela in late January 2019 to put pressure on the country’s socialist President Nicolas Maduro to step down. Reliance cannot afford to rile up its relationship with US authorities because it has investments in US shale gas projects and trades fuel in North America.