Gazprombank Freezes PDVSA Accounts

Gazprombank Freezes PDVSA Accounts

Gazprombank has halted transactions with the Venezuelan state oil company PDVSA as well as freeze its accounts in order to reduce the risk of the bank from falling under the United States sanctions.  Many foreign firms have already cut their exposure to PDVSA ever since the sanctions were imposed. However, the fact that Gazprombank, a Russian lender is also following suit is of noteworthy as Kremlin had been one of the staunchest supporters of the Venezuelan President Nicolas Maduro.

According to a source, all of the Venezuelan state oil company PDVSA accounts are frozen, stopping the company from carrying out operations. Gazprombank declined to comment.  Interestingly, PDVSA brandished this news as fake news and declined to offer a comment. In order to sideline new U.S. sanctions, PDVSA was encouraging its joint venture customers to deposit their oil sales proceeds into the Gazprombank accounts.

The U.S. sanctions imposed on 28th of last month were aimed at preventing the Venezuelan President Nicolas Maduro from accessing Venezuela’s oil revenue after Juan Guaido, the opposition leader proclaimed himself as the interim president. Juan Guaido received plenty of Western support.

Gazprombank is Russia’s 3rd largest lender by assets even included the Russian state gas company Gazprom among its shareholders.  The bank has been a keeper of the PDVSA accounts for the last several years. PDVSA signed a deal with the bank in 2013 for $1 billion. This was used for financing the Petrozamora company. According to the source, the Petrozamora accounts have been frozen too.

Russian officials have announced their support for Maduro and their intention to stand by the Venezuelan President. They also condemned the actions of the opposing leader, which they view as a U.S. inspired attempt to usurp power.  This sudden move by Gazprombank has left other Russians firms in a quandary as they find themselves wanting to back Maduro and endorse the Kremlin line and also fear being exposed to the secondary U.S. sanction which could be harmful to business.

The political crisis in Venezuela led to tightening U.S. sanctions against the country. PDVSA was put under restrictions in late January. Washington also froze the company’s assets worth $7 billion. The U.S. is willing to ease sanctions only if the company’s control is passed onto the opposition leader, Juan Guaido who has declared himself as the interim president.  All the countries of the Lima Group (except Mexico) along with the U.S and a few European countries have recognized Guaido as the new President of Venezuela.

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