Russian control of U.S. oil infrastructure feared if Venezuela defaults

|By:, SA News Editor

A default by Venezuela could move the Russian government closer to gaining control of U.S. refineries and pipelines, two U.S. congressmen warn in a letter urging the Treasury Department to review the situation.

The letter refers to a $1.5B loan that Russia's state-owned Rosneft (OTC:RNFTF) made in November to Venezuela's state-owned oil company PdVSA, in which the Venezuelan company put up 49.9% of the equity in Citgo Petroleum as collateral; Citgo owns three refineries in the U.S., and a network of terminals and pipelines running across 24 states.

PdVSA has said it expects to make a $2.1B bond payment due tomorrow, but Venezuela has spiraled into an economic crisis brought on by lower oil prices, and the CDS market indicates the country has a 41% chance of default or missed payment in the next six months.

The congressmen, the two ranking members of the Subcommittee on the Western Hemisphere of the House Committee on Foreign Affairs, are asking Treassury to bring the matter before CFIUS, the committee that reviews foreign takeovers of U.S. businesses.