Sec. 10. Concerns over PDVSA transactions with Rosneft
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Congress makes the following findings: In late 2016, Venezuelan state-owned oil company Petróleos de Venezuela, S.A. (referred to in this section as PDVSA ), through a no-compete transaction, secured a loan from Russian government-controlled oil company Rosneft, using 49.9 percent of PDVSA’s American subsidiary, CITGO Petroleum Corporation, including its assets in the United States, as collateral. As a result of this transaction, 100 percent of CITGO is held as collateral by PDVSA’s creditors.
CITGO, a wholly owned subsidiary of PDVSA, is engaged in interstate commerce and owns and controls critical energy infrastructure in 19 States in the United States, including an extensive network of pipelines, 48 terminals, and 3 refineries, with a combined oil refining capacity of 749,000 barrels per day. CITGO’s refinery in Lake Charles, Louisiana is the sixth largest refinery in the United States. The Department of the Treasury imposed sanctions on Rosneft, which is controlled by the Russian Government, and its Executive Chairman, Igor Sechin, following Russia’s military invasion of Ukraine and its illegal annexation of Crimea in 2014.
The Department of Homeland Security has designated the energy sector as critical to United States infrastructure. The growing economic crisis in Venezuela raises the probability that the Government of Venezuela and PDVSA will default on their international debt obligations, resulting in a scenario in which Rosneft could come into control of CITGO’s United States energy infrastructure holdings. It is the sense of Congress that— control of critical United States energy infrastructure by Rosneft, a Russian government-controlled entity currently under United States sanctions, would pose a significant risk to United States national security and energy security; the President should take all necessary steps to prevent Rosneft from gaining control of critical United States interstate energy infrastructure; a default by PDVSA on its loan from Rosneft, resulting in Rosneft coming into possession of PDVSA’s United States CITGO assets, would warrant careful consideration by the Committee on Foreign Investment in the United States; if PDVSA defaults on its debt obligations, the Department of the Treasury’s Office of Foreign Asset Control should review CITGO’s transactions with United States persons to assess and ensure compliance with United States sanctions policies and regulations; and the Department of Homeland Security should conduct an assessment of the security risks posed by foreign control of CITGO’s United States energy infrastructure holdings and keep the relevant committees of Congress fully informed of its findings and any subsequent strategy to address vulnerabilities to United States energy security as a result.