For the past six months, even as Obama and the EU were laying harsher sanctions on the Kremlin, one group of companies had managed to sneak by unscathed and largely avoided being impacted by Russia’s isolation by the West: the world’s biggest E&P companies, as explained in detail over a month ago in “Exxon Drilling Russian Arctic Shows Sanction Lack Bite.”
All that is about to change, because while sanctions until this moment had been largely intended tospecifically allow energy companies to continue their status quo in Russia, as of this Friday, it is precisely the E&Ps that are being targeted, as we noted on Friday, and as Reuters follows up today, reporting that some of the world’s largest companies, namely Exxon, Anglo-Dutch Royal Dutch Shell, Norway’s Statoil and Italian ENI, will have to be put their Russian projects on hold: to wit, the companies will have 14 days to wind-down activities.
Projects now in jeopardy include a landmark drilling program by U. S. giant Exxon Mobil in the Russian Arctic that started in August as part of a joint venture with the Kremlin’s oil champion Rosneft. Now this and dozens of other projects that Rosneft and Gazprom Neft agreed with Exxon, Anglo-Dutch Royal Dutch Shell, Norway’s Statoil and Italian ENI will have to be put on hold.
“Cutting off U. S. and E. U. sources of technology and services and goods for those projects makes it impossible, or at least extraordinarily difficult for these projects to continue…There are not ready substitutes elsewhere,” a senior U. S. administration official told a briefing on Friday.
The companies will have 14 days to wind-down activities.
This post was published at Zero Hedge on 09/14/2014.