Frankly, I’m skeptical about the impact these sanctions are having. There was an article in Kommersant today saying that there are workarounds on most “dual-use” items that have been sanctioned. This means that certain tech items that are used for more than one purpose (say both military and civilian) can be said to be civilian on the import/export forms, even though they are destined for a military purpose. In addition, most Western companies just ignore the ban anyway, because they need the customers.
“There are no problems with any of our existing projects – all of the contracted equipment is being delivered… Workarounds are not necessary.”
— Source close to Rosneft
Today’s new sanctions came directly on the heels of Russia’s veto of a tribunal to investigate the downing of commercial flight MH17 last July in Ukraine.
So what and who are in the new sanctions?
An associate of Putin crony, Gennady Timchenko, was also sanctioned:
Along with several companies that appear to be connected to Timchenko as well:
The son of Russian oligarch, and long-time Putin crony, Arkady Rotenberg was also listed:
There is also a lengthy list of companies under the heading of “sectoral sanctions”. These companies all fall into two categories: either they are associated with Rosneft, or with Vnesheconombank (VEB).
Entities include names like the “Development Corporation of the North Caucasus”, and the “Russian Direct Investment Fund”, both of which are financed by Vnesheconombank.
Rosneft’s list include subsidiaries of Rosneft, and different refineries.
Meanwhile, Rosneft just inked two deals with Western companies. First a deal with Exxon-Mobil to work on an exploration project in Mozambique. Then a second deal was announced with a company called Skyland Petroleum for a joint venture based on “Taas-Yuryakh Neftegazodobycha”. In a statement posted on Skyland’s website from June, the deal was discussed at the St Petersburg International Economic Forum (often referred to as Russia’s answer to Davos) in June. It includes the option for Skyland to buy up to 29% of Taas-Yuryakh Neftegazodobycha, “and creating joint venture for development of Srednebotuobinskoye oil and gas condensate field.”
The statement continues:
“Development of Srednebotuobinskoye field – one of the largest fields in Eastern Siberia – will allow to create infrastructure for further exploration and production in the region.”
Tucked in the bottom of the statement is a note that BP also inked a deal with Rosneft at SPIEF for a 20% portion of Taas-Yuryakh Neftegazodobycha.
So on the one hand, Rosneft and Vnesheconombank have been hobbled by the sanctions, but deals are still being made, and workarounds are still possible.