Mukesh Ambani, the chairman of Reliance Industries Limited, has been importing crude oil from Venezuela despite United States sanctions imposed in January 2019, without any apparent consequences, ostensibly by engaging an influential lobbyist, Brian Ballard, known to be a close aide and old friend of the US president, Donald Trump. Ballard was one of the top fundraisers for Trump’s 2016 presidential campaign. Publicly available data of the ministry of commerce and industry reveals that, in the year since the US imposed sanctions on Venezuela’s state-owned oil company, Reliance has imported at least ten million metric tonne of crude oil—over 77 million barrels—worth more than $3.75 billion.
It is likely that Reliance escaped any consequences for importing Venezuela crude as a result of, at least in part, the efforts by two lobbying firms engaged by Ambani—Eversheds Sutherland and Ballard Partners—on behalf of Reliance Industries Limited and its US subsidiary, RIL USA, respectively. In an April 2018 profile, the news magazine Politico identified Brian Ballard as “The Most Powerful Lobbyist in Trump’s Washington.” The report noted that Ballard had known Trump for over thirty years, and that he “continues to raise millions” for the president’s ongoing re-election campaign. According to the public disclosures filed by the two firms, Ambani engaged them to lobby the US state and treasury departments, the White House and the Senate, on issues pertaining to energy, international trade and sanctions. Reliance paid them a cumulative sum of $775,000—$330,000 to Ballard Partners and $445,000 to Eversheds Sutherland—for their lobbying efforts.
Trump imposed sanctions against Petroleos de Venezuela, SA—or PdVSA—a state-owned Venezuelan oil company, in late January 2019. The Trump administration imposed the sanctions weeks after Venezuelan president, Nicolás Maduro, was sworn in for a second term, amid accusations of rigging the elections that brought him to power again. That month, his opponent Juan Guaidó declared himself the interim president, contesting Maduro’s swearing in, supported by the US. Trump’s sanctions were part of US efforts to put pressure on Maduro. The sanctions prohibited all US individuals and companies from engaging in transactions with the company. It also prevented any non-US company from purchasing PDVSA crude if the transaction involved a US person or any other nexus, including trading in dollars or using the US financial system, which could affect Indian companies such as Reliance. The US government granted all such companies a 90-day period, till 28 April, to wind down its operations with PdVSA. But two companies, Reliance and Nayara Energy, continued the crude oil imports even after this period.
Reliance owns two ports in Gujarat—Sikka and SEZ Jamnagar—and the world’s largest refinery complex, which processes more than one million barrels of crude oil per day. Nayara was formerly Essar Oil. The Russian state-owned Rosneft Oil Company acquired it in 2017. Nayara now operates the second-largest refinery in the country out of Vadinar, in Gujarat, where it owns a port through which it imports the Venezuelan crude oil. Following the sanctions, news reports noted that Rosneft had become the source through which PdVSA continued its oil import. The Russian oil giant has maintained that it could receive PdVSA crude oil without violating the sanctions because the oil was given as part of the repayment of debt for the Venezuelan oil company’s past dues to Rosneft. On 18 April, Reuters reported that PdVSA had asked its clients, including Reliance, to purchase its crude oil through Rosneft’s trading unit, in order to avoid the sanctions.
Two days later, Reliance issued a press release to clarify its position. “Reliance has purchased Venezuelan crude oil from companies such as ROSNEFT long before the imposition of US sanctions, as they do get title to Venezuelan oil in return for reduction in their prior debt,” the statement noted. “Since sanctions were imposed, Reliance has made such purchases with the full knowledge and approval of the US Department of State (USDOS), and Reliance has informed USDOS of specific volumes and transactions. Such transactions do not lead to any consequent payment to PDVSA and do not violate U.S. sanctions or policies.”