Tags: sanctions | Russia | energy | companies

Sanctions Against Russia May Harm Western Energy Companies

By    |   Tuesday, 29 April 2014 02:38 PM

The latest U.S. sanctions against Russia, which include restraints on President Vladimir Putin's top energy aide Igor Sechin, could cause big trouble for Western oil companies.

Firms that may be impacted include BP, Chevron, ExxonMobil, ConocoPhillips, Eni, Royal Dutch Shell, Statoil and General Electric.

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Sechin is president and chairman of Rosneft, the world's largest publicly-traded oil producer.

The latest U.S. sanctions, announced Monday, hit 17 companies, many of them involved in the oil and gas sector, The New York Times reports.

American companies still can do business with Rosneft, but everything is trickier now. That's bad news for BP, Exxon Mobil and Shell, which have invested in Russia for years, seeking access to its oil deposits.

BP owns almost 20 percent of Rosneft’s stock, and about one-third of BP's global oil and gas production comes from Russia. Shell is involved with a major natural gas facility on Sakhalin Island, according to The Times. And Exxon Mobil has a joint exploration venture with Rosneft in the Arctic.

Russia expert Padma Desai of Columbia University says sanctions could disrupt business for U.S. energy companies in Russia. "Everyone wants the environment to settle down," she told the newspaper.

Economist Nouriel Roubini of New York University is worried that the confrontation between the West and Russia over Ukraine will turn from a cold war into a hot one.

That could happen if Russia invades eastern Ukraine, he told Bloomberg TV. "Global risk aversion" would then be the rule in financial markets.

Russia could cut off natural gas exports to Europe, helping to send the eurozone back into recession, Roubini said. Russia supplies one-third of the continent's gas imports.

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The latest U.S. sanctions against Russia, which include restraints on President Vladimir Putin's top energy aide Igor Sechin, could cause big trouble for Western oil companies.
sanctions, Russia, energy, companies
295
2014-38-29
Tuesday, 29 April 2014 02:38 PM
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