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Treasury Secretary: Russia's Citgo deal a "national security issue"

Russian connection to U.S. oil?
Russia's potential link to American oil 02:30

WASHINGTON — U.S. Treasury Secretary Steven Mnuchin has acknowledged for the first time that federal officials will scrutinize a deal that could lead state-owned Russian energy giant Rosneft to taking a large stake in U.S. oil company Citgo.

Senator Bob Menendez, D-New Jersey, on Thursday asked Mnuchin about the deal, which CBS News first reported on in March, during the Treasury Secretary's testimony before the Senate Banking, Housing and Urban Affairs Committee. In November, Rosneft issued a loan to to Venezuela's PDVSA, which owns Citgo. PDSVA is financially troubled, and if it goes under Rosneft could end up with a 49.9 percent stake in Citgo. 

Menendez noted that additional transactions could give the Russian company majority control over Citgo, which operates three pipelines and three refineries in the U.S.

"This is an issue that I am aware of not just from your letter, but from other people who have raised the concern," Mnuchin said. He added that any transaction involving Rosneft and Citgo would be reviewed by the Committee on Foreign Investment in the United States, an inter-agency panel that assesses deals for their potential impact on national security. 

Mnuchin said he would be willing to provide more details about the review to senators in a classified setting.

Menendez was among a bipartisan group of senators who on May 3 proposed a wide-ranging bill aimed at the ongoing political and humanitarian crisis in Venezuela. 

The bill's other sponsors include Sens. Ben Cardin, D-Maryland.; Marco Rubio, R-Florida; John Cornyn, R-Texas; Dick Durbin, D-Illinois.; John McCain, R-Arizona; Bill Nelson, D-Florida; Tim Kaine. D-Virgina; and Chris Van Hollen, D-Maryland.

The bill was submitted five days after Mnuchin missed a deadline to respond to a letter sent by six senators, including some who are sponsors of the bill, calling for the Treasury to investigate PDVSA's deal with Rosneft. PDVSA CEO Igor Sechin is one of Russian President Vladimir Putin's closest allies.

Just over 50 percent of Rosneft is owned by Rosneftegaz, a Russian state agency run by Sechin. A 19.5 percent stake in the company was purchased in December by a consortium of investors that include Anglo-Swiss commodities producer and trader Glencore, sovereign wealth fund Qatar Investment Authority, and anonymous investors based in the Cayman Islands.

A former British spy's 35-page dossier about alleged communications between Trump associates and a Russian official includes claims that in July 2016, Sechin met with energy industry investor Carter Page, who at the time was a foreign policy adviser to the Trump presidential campaign. Page and Russian officials have denied the meeting occurred.    

The deal "could have significant national security implications for critical energy infrastructure in the United States," the senators wrote in their April 10 letter to Mnuchin.

Got news tips about the petroleum industry, international finance or public corruption? Email this reporter at, or via his encrypted address, (PGP fingerprint: 4b97 34aa d2c0 a35d a498 3cea 6279 22f8 eee8 4e24).

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