Venezuelan Plan: Make Nynas Russian Unit

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Officials in Venezuela’s embattled government have drafted a plan to restructure the country’s sacred national oil company, Petroleos de Venezuela S.A., proposing among other things to create a Russian subsidiary that would absorb at least a stake in Nynas AB.

The plan was reported late last month by multiple news sources, including Argus and Reuters, which described it as a sweeping strategy to reverse a course set by former President Hugo Chavez, which created a bloated business that championed social causes. The new plan reportedly calls for a much streamlined company that would embrace alliances with private foreign businesses.

Nynas, which is headquartered in Stockholm, is one of the world’s largest suppliers of naphthenic base stocks. It is a joint venture between PdVSA and Finnish oil company Neste, with the Venezuelan company owning just over 50 percent.

PdVSA’s stake has exposed Nynas to sanctions by the United States, which recognizes opposition leader Juan Guaido as Venezuela’s rightful president. Earlier this year Nynas proposed restructuring its ownership to escape those sanctions. The company has not disclosed details of that plan, although it did report that the U.S. government confirmed it would meet its requirements for avoiding sanctions.

Neither the Reuters nor Argus articles indicated whether all of Nynas would be folded into a Russian subsidiary or just PdVSA’s stake.

Nynas officials declined yesterday to say if the Venezuelan government proposal to fold Nynas into a Russian subsidiary was the same as Nynas’ restructuring proposal. A spokesperson referred all questions to PdVSA officials, who could not be reached for comment.

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