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Russian takeover of Linden oil refinery would be worrisome, Menendez says

Oil Prices
Traffic on the Turnpike passes Citgo oil storage tanks in Linden. (AP Photo)

LINDEN — An city oil facility owned and operated by the Venezuelan national company Citgo could transfer to Russian hands if the South American oil giant defaults on a large loan.

According to a report by Fox Business, there is potential for Rosneft, the state-run oil business in Russia, to take over Citgo, which has raised red flags among U.S. Sen. Robert Menendez, D-N.J., and others in Washington.

Fox and other media outlets reported that Venezuela received a large loan from Rosneft in December, offering 49.9 percent of Citgo as collateral. The report says if Rosneft buys more bonds of the Venezuelan company, they could then control the company.

Should Venezuela default on the loan, several facilities, including Tremley Point in Linden, could shift under Russian control.

“Russia has used cyberattacks to disrupt energy grids in Ukraine,” Menendez said in a letter to the Committee on Foreign Investment in the United States (CFIUS). “Likewise, Putin has used the Russian oil and gas industry to manipulate energy prices in Eastern European economies. We cannot let that happen here in the United States.”

In the letter, Menendez and others said “we cannot give Putin any openings to affect the flow of oil or toy with Americans’ prices at the pump. And we cannot play Russian roulette with America’s energy infrastructure. The risk to our national security and our economy is not one I’m willing to take.”

This is not the first time Rosneft has come across the government’s radar screen. According to Menendez, both the company and Igor Sechin, who he describes as “a Putin crony” who runs the company, were sanctioned by the United States after Russia invaded Ukraine in 2014.

The fate of Citgo could put further strain on the relationship with Russia, with Menendez pointing to Russia’s alleged involvement in the recent presidential election.

“Given Russia’s interference in the U.S. election and ongoing meddling in European elections, not to mention its habit of invading and bullying its neighbors, the last thing the United States should be doing is handing the Kremlin a significant ownership in a major U.S. energy supplier,” said Jennifer Harris, a senior fellow at the Council on Foreign Relations.

Menendez also was part of a letter sent to new Treasury Secretary Steven Mnuchin. In that letter, Menendez and others urged the government to keep a watchful eye on any potential transactions between the two governments and their respective companies.

“Over the course of the last year, Russia has escalated its attacks on the United States in various ways, including cyber campaigns intended to sow distrust of our democratic institutions and violating arms control agreements,” the letter said. “Russia has also expressed strong opposition to existing sanctions. As such, we are extremely concerned that Rosneft’s control of a major U.S. energy supplier could pose a grave threat to American energy security, impact the flow and price of gasoline for American consumers, and expose critical US infrastructure to national security threats.”

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