Russia has set up a wholly state-owned oil company named Roszarubezhneft after Rosneft announced it would exit Venezuela and ditch its Venezuelan assets to a new--as of yesterday--and unnamed company,?

Russia has set up a wholly state-owned oil company named Roszarubezhneft after Rosneft announced it would exit Venezuela and ditch its Venezuelan assets to a new--as of yesterday--and unnamed company, Reuters reports.

The news agency also cited an unnamed source as saying Moscow had cut its stake in Rosneft below a majority stake after it agreed to buy Rosneft's Venezuelan assets.

The capital of Roszarubezhneft was set at some $4 billion, according to official data, which Russian business daily Vedomosti?called??massive?. According to the daily, Moscow paid for the Venezuelan assets in Rosneft stock, which is where the reduction of the state's interest in the company came from. The value of the deal was 9.6 percent in Rosneft.

Rosneft announced its pullout from Venezuela over the weekend without going into details about the reasons. However, these are obvious enough and boil down to the effect of U.S. oil sanctions on the company.

Earlier this year, Washington?announced?sanctions on Rosneft's Swiss-based trading arm as part of its attempts to cut off all revenue streams to the Maduro government in Caracas. The U.S. has signaled that it is ready to tighten even more the noose around the Venezuelan government.?

?Today Rosneft concluded an agreement with the company 100% owned by the Government of Russian Federation, to sell all of its interest and cease participation in its Venezuelan businesses, including joint ventures of Petromonagas, Petroperija, Boqueron, Petromiranda and Petrovictoria, as well as oil-field services companies, commercial and trading operations,? the state giant?said?in a press release on Saturday.

Meanwhile, Venezuela's oil production fell to the lowest in five months, Reuters?reported?yesterday, with the total average at some 670,000 bpd, according to documents and unnamed sources. That's down from an average of around 900,000 bpd for November to February.

By Irina Slav for Oilprice.com

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