http://oilprice.com/Energy/Energy-General/Could-Rosneft-Take-Control-Of-Citgo.html

Rosneft could take control of 49.9 percent of Citgo – the troubled U.S. business of Venezuela’s state-owned oil company, media are warning. PDVSA used the stake as collateral for a $1.5-billion loan provided by Rosneft last year, and the Russian company immediately filed a lien with the Delaware Department of State asserting its right to ownership in case PDVSA defaults on debt payments. Now, the possibility of a default has become more pronounced, spurring speculation about what might happen should this possibility turn into a certainty.

The loan deal itself sparked protests in the U.S. energy industry, with ConocoPhillips and a Canadian miner, Crystallex, asking the federal court in Delaware to cancel the lien, even though the use of stock as collateral in loan agreements is standard practice. This time, however, there are geopolitical implications weighing in, and it’s these implications that will, in all likelihood, make the idea of Russian ownership of a U.S. business purely theoretical.

A default on the part of PDVSA is seen as likely by rating agencies and observers. With the OPEC production cut deal failing to lift international oil prices in any substantial way, Caracas is quickly running out of options. At the start of the year, the country placed a $5-billion bond issue with state-run Banco de Venezuela, in its latest desperate attempt to raise some cash for essentials such as food and medicine.