Reliance and the oil story, Venezuela dealings bring fresh charges

Notably the KG basin controversy led to high jump in petrol prices in 2014

Reliance issues a statement earlier today denying all charges of being involved in an arrangement that leads to cash payment for oil supplies to Venezuelan national oil company PDVSA via third parties. "Such transactions do not lead to any consequent payment to PDVSA and do not violate US sanctions or policies," said Reliance. Reliance's price agreement with such sellers is at market and payments by Reliance for such supplies are settled in cash or by-product supply bilaterally between Reliance and such sellers. 

The United States had earlier appreciated India's efforts adding to Washington’s sanctions to restrict exports of Venezuelan oil in the global energy market. several Indian companies stopped importing oil from Venezuela after Washington urged oil refineries around the world to cut their dealings with Caracas or face sanctions themselves. Reliance strongly puts across its case that no action has been taken without the knowledge of US authorities. 

Reliance had last month stated that it had stopped all oil exports to US sanctions-hit Venezuela and will not resume sales until sanctions are lifted. Reliance, whose twin refineries at Jamnagar in Gujarat were major importers of Venezuelan crude oil, has reduced purchases by about a third. While releasing quarterly results on Thursday, Reliance’s joint CFO V. Srikanth said it was sourcing Venezuelan crude from Russian and Chinese companies. Payment made to them for supplies are adjusted against dues owed by Venezuela to these companies, he said.

Sources close to Reliance say the firm had a contract to buy 3 million barrels of crude oil from Venezuela a month, which has been reduced to about 2 million barrels already. Venezuela’s state-owned oil company PDVSA has been placed on the US Treasury Department’s Specially Designated Nationals list, which generally prohibits American citizens from dealing with named firms or individuals.