PDVSA To Retain Obligations To Rosneft After Reorganization - Venezuelan Ambassador

The planned reorganization of Venezuela's state-owned oil company PDVSA will not eliminate its obligations to Russia's Rosneft oil giant, Venezuelan Ambassador in Russia Carlos Rafael Faria Tortosa told Sputnik in an interview.

MOSCOW (UrduPoint News / Sputnik - 24th September, 2018) The planned reorganization of Venezuela's state-owned oil company PDVSA will not eliminate its obligations to Russia's Rosneft oil giant, Venezuelan Ambassador in Russia Carlos Rafael Faria Tortosa told Sputnik in an interview.

Earlier in September, the Venezuelan authorities created a commission to reorganize PDVSA in the next months, according to the Official Gazette. The commission is expected to propose necessary adjustments to the organizational, administrative and functional structure of the company, including mergers and dissolutions. The commission will operate until December 31.

"The reorganization is one thing, and whether it could have an impact [on the cooperation] is another one.

The reorganization, which may take place, will in no way lead to the refusal to fulfill its obligations to Rosneft," the ambassador said.

In August 2017, Rosneft stated that it had given around $6.5 billion to PDVSA in advance payments for oil deliveries, and expected the debt to be paid off by the end of 2020. In August, Rosneft announced that since PDVSA had already paid $1 billion of its debts in the first half of 2018, bringing the total down to $3.6 billion, excluding interest accrued, as of June 30, 2018.

Oil production in Venezuela has declined over the past few months due to economic and political crises, as well as US sanctions, which resulted in government revenues' drop, soaring inflation and severe shortage of goods in the country.