The Trump administration has once again warned companies importing crude from Venezuela that they could face economic sanctions, prompting Reliance Industries Ltd (RIL) to state in defence that its purchase of crude oil from the country was reported and approved by the US government and it remains in compliance with US sanction policies.
“All of Reliance’s purchases of Venezuela crude oil are reported to and approved by the US government. We are in frequent communications with US government officials regarding Venezuela and continuously keep them apprised of our actions,” an RIL spokesperson said in an e-mailed statement when asked to comment on reports of the Trump administration warning energy companies having ties with Venezuela to “tread cautiously”.
The US imposed economic sanctions on Venezuela in January last year to curb the latter’s crude exports and put pressure on socialist President Nicolas Maduro to step down. The socialist president remains in power despite deep unpopularity and years-long economic crisis.
“Reliance is not sharing any oilfield in Venezuela nor does it operate as an intermediary for sale to third parties. All Venezuelan crude oil sourced by Reliance is for processing in Reliance’s refineries only,” the statement said.
It added that RIL will always remain in compliance with US sanctions policies affecting Venezuela.
In March last year, RIL had said it had stopped all oil exports to Venezuela and would not resume sales until sanctions are lifted. After a four-month gap, RIL resumed direct purchases of crude from Venezuela which it processes at its Jamnagar refinery.
Shares of RIL on Friday ended lower by 1.64 per cent, or Rs 23.90, at Rs 1,433.75.
Besides RIL, Chevron of the US and Russia’s Rosneft stare at US retaliation. The US had threatened these companies last August with sanctions but didn’t go through with it.
Venezuela’s state-owned oil company PDVSA has been placed on the US Treasury Department’s Specially Designated Nations list, which generally prohibits American citizens from dealing with the named firms or individuals.
This has resulted in international banks and shipping companies as well as RIL ceasing any transactions with the firm.
These restrictions came into force on March 29, 2019, after an eight-week winding down period for contracts that were already in effect.
During the third quarter ended December 31, 2019, RIL’s revenues from refining and marketing declined 7.2 per cent over the same period last year to Rs 103,718 crore.
The gross refining margins had disappointed the Street as they came at $9.2 per barrel, lower than the forecast of around $ 9.5 per barrel.