Western service companies, a valuable source of expertise and equipment for Russian oil majors, will be forced to limit or even cancel their operations in the country as the result of a new round of sanctions imposed by the European Union and the U.S. on Moscow last week, industry experts said Monday. This could delay some of Russia's hard-to-reach oil development projects and see Western service firms lose revenue.
On Friday, following similar measures taken by the EU, the U.S. imposed sanctions on Russian hydrocarbons producers Gazprom, Gazprom Neft, LUKoil, Surgutneftegaz and Rosneft, banning Western firms from supporting their activities in exploration or production of oil from deep water, Arctic offshore or shale projects. U.S. companies have until Sept. 26 to wind down transactions with the sanctioned oil majors in these areas.
According to REnergyCO, a Canada-based consultancy that analyzes the oil and gas industry of former Soviet countries, about a quarter of all companies involved in the oil business in Russia are based in the West. Russia's Energy Ministry earlier said that in some areas, like development of unconventional or hard-to-recover reserves, the involvement of Western companies rises to as much as 70 percent.
INC News, 15/09/2014
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