BUSINESS & ECONOMY

Menendez Worries Russia Could Take Over Citgo

By Brenda Flanagan
Correspondent

When you pull up to the pump at Citgo, will Russia set the price per gallon? Could Russian President Vladimir Putin shut down Citgo’s pipelines and fuel terminals, including its facility in Linden? Sen. Bob Menendez says it’s possible if Russia succeeds in what he considers its quest to take over Citgo.

“We cannot give Putin any opening to affect the flow of oil, or toy with American prices at the pump. And we cannot play Russian roulette with America’s energy infrastructure,” Menendez said.

Menendez believes Russia’s waging geopolitical war, using corporations like Citgo as weapons. How? Last November, Russia’s state-owned oil company — Rosneft — loaned $1.5 billion to Venezuela’s state-owned oil company. Venezuela owns Citgo, and put about half the company up as collateral for the Russian loan. If Venezuela defaults — which looks likely, according to U.S. bond rating experts — Rosneft could get Citgo.

“The potential for a company partially owned by the Russian government to operate an extensive network of refineries and pipelines across the United States raises some serious red flags,” Menendez said.

“A deal of this sort is unprecedented. We’ve never seen a deal of this magnitude come through with the reach that it has into the U.S.’s energy grid,” said Council on Foreign Relations Senior Fellow Jennifer Harris. “This is increasingly the face of statecraft today. You see Russia in particular, China not far behind waging with economic instruments what used to be the stuff of armies.”

Citgo operates 48 oil terminals, including three refineries, plus several pipelines in the U.S. What could stop a Russian takeover? Sanctions, for one. The Obama administration imposed those sanctions after Russia invaded and annexed Crimea and they forbid Rosneft from gaining U.S. assets. But Russia’s been pushing the Trump administration to lift those sanctions and the Russia-Trump relationship remains under scrutiny by U.S. intelligence agencies and congressional committees.

Look at the timing: “This loan was signed on Nov. 30 — some three weeks after the U.S. election when, I believe, the Russian government had reason to expect that U.S. sanctions could be loosened, whereupon they could come into a majority ownership share of one of America’s 10 largest oil companies,” Harris said.

When the president ordered a Tomahawk missile strike on a Syrian airbase last week, it raised questions about the Trump administration’s foreign policy. With Secretary of State Rex Tillerson conducting meetings in Moscow today, Menendez warned, “We must be vigilant about any attempts by Russia to gain any foothold here in our country by any means.”

Menendez urged the White House to leave sanctions in force. He also joined five other senators in a bipartisan letter asking a special committee on foreign investment to deny any acquisition of Citgo by Russia. Citgo did not respond to our requests for comment.