Russia Takes Over Venezuelas Oil Industry

(Hot Air) We already learned that Russia was sending bombers to Venezuela for military exercises and supporting the countrys imploding economy. What could Vladimir Putin have wanted in exchange? Were probably seeing the answer come into focus as Russia moves in to help" Venezuelan dictator Nicolas Maduro as we head into the new year. Putin is going to bail out Maduros failing government with some cash in exchange for establishing some measure of control over that nations vast crude oil reserves that are currently lying mostly dormant. (WaPo) As allies go Venezuela is a relatively cheap one for Russia. But the potential returns on Moscows investment there could be priceless. In exchange for modest loans and bailouts over the past decade Russia now owns significant parts of at least five oil fields in Venezuela which holds the worlds largest reserves along with 30 years worth of future output from two Caribbean natural-gas fields. Venezuela also has signed over 49.9 percent of Citgo its wholly owned company in the United States including three Gulf Coast refineries and a countrywide web of pipelines as collateral to Russias state-owned Rosneft oil behemoth for a reported $1.5 billion in desperately needed cash. This is bad news for Venezuela and also an undesirable development for the United States. Were currently in a battle with the Russians (among others) for dominance in the international oil and gas market. Weve only recently gained the upper hand in that arena but with Russia now owning half of Citgo and holding the banknotes on much of Venezuelas proven crude oil reserves thats going to give them a serious leg up.