Russian sanctions response hits energy cooperation: Fuel for Thought

Russia seems to be entering a new stage of sanctions adaptation, building on its growing technological capabilities in energy, as well as access to alternative sources of financing to become less dependent on cooperation deals with Western companies. The collapse of two major deals between Russian and western oil companies in 2019 may indicate that Moscow is now looking to reduce its exposure to Western financing and technology as it braces itself for expected tougher sanctions. Initial sanctions, imposed on Russia in 2014, forced western majors to leave some promising projects to meet requirements of the US and EU legislators, while the Russian authorities continued to welcome the expansion of cooperation with its traditional partners within unsanctioned projects. The so-called sectoral sanctions banned transferring of money and technology to development of shale oil reserves and those located in deepwater and offshore Arctic. Russia calls time on two deals But in the most recent cases, it has been Russia breaking off deals with western companies amid concerns that new US sanctions may impact Russia ’s entire energy sector. These involved the purchase by the world’s biggest oil service provider Schlumberger into Russia ’s biggest drilling company Eurasia Drilling (EDC) and long-discussed… continue reading

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