New economic sanctions against Russia will place additional restrictions on international companies participating in oil projects with Russian companies. The sanctions also make restrictions mandatory on projects within the European Union, removing a previous condition allowing EU waivers.
Key provisions that affect the oil industry:
- Place sanctions that prevent companies from participating in new projects with the potential to produce oil in Arctic and deepwater settings and shale formations, inside or outside of Russia, where a Russian company has a 33% or greater interest.
- Establish optional sanctions that could be imposed on companies facilitating or investing in Russian export pipelines.
Unlike previous restrictions that were optional for US or EU authorities to apply, the new law moves the US sanctions to primary status, which makes them mandatory. The new requirement could challenge a waiver granted to Eni to drill a deepwater well in the Black Sea. Although allowed to proceed by the EU, the company could face US sanctions.
Read the full article in the Journal of Petroleum Technology.