What does Venezuela crisis mean for Russia?

What does Venezuela crisis mean for Russia?

Russia may scale down military-technical cooperation with Venezuela, Russian Federation Council member Frants Klintsevich said.

"It was a real aggression from the United States in Venezuela, they used terrorist methods to change power in Venezuela and form a puppet government acceptable to the U.S.," he explained.

In addition, Klintsevich said that another reason behind the United States' attempt to change the regime in Venezuela was to prevent the developing of Russian-Venezuelan military-technical cooperation, RIA Novosti reports.

On January 23, President of Venezuela's National Assembly and opposition leader Juan Guaido has declared himself acting president during an opposition rally in Caracas.

U.S. President Donald Trump has recognized Guaido as Venezuela's interim president. Venezuela's President Nicolas Maduro has declared the National Assembly unconstitutional. Juan Guaido as president of Venezuela was recognized by the U.S., Canada, Argentina, Brazil, Georgia, Chile, Colombia, Costa Rica, Guatemala, Honduras, Panama, Paraguay and Peru.

Thousands of anti-government protesters marched across Venezuela yesterday to demand the resignation of President Nicolas Maduro. Government supporters held counter-rallies for Maduro also. At least 16 people died in clashes, while at least 175 people have been detained.

A leading analyst of the National Energy Security Fund, a lecturer at the Financial University under the Government of the Russian Federation, Igor Yushkov, speaking to Vestnik Kavkaza, noted that Russia faces the risk of significant losses due to regime change. “Basically, Rosneft works there now. As soon as the attention to Venezuela weakened, all our other companies exited, selling their shares to Rosneft, and now it has five projects in Venezuela with 16-40% of shares," he recalled.

"In addition to investing in oil production in Venezuela, Rosneft also provided loans to Venezuelan business, the total amount of Russian investments in the country reached $17 billion. These loans can't be taken back, even collateral cannot be returned, because it consists of 49% of the oil company's shares with arrested assets in the U.S. The only question now is whether the new authorities will nationalize Rosneft's assets in Venezuela," Igor Yushkov pointed out.

"If Maduro stays in power, the economic situation in Venezuela will not change,things will just get worse, there will have no money at all, especially to repay the loan to Rosneft. If the pro-Western government comes, it is quite possible that they will say to forget about the country's debts during Chavez and Maduro times. The Guaido government government will repay priority loans to Western companies whose property was nationalized under Chavez. At the same time, Rosneft will most likely not be deprived of their assets, until there are more people wanting to invest in Venezuelan projects. Now the main task of the authorities is to raise output, and if Rosneft agrees to stay there, they will not touch it at first," the expert concluded.