As solar power continues to…
Saudi Arabia, OPEC’s de facto…
New U.S. sanctions on Russia that include asset freezes and travel bans on several top Russian officials, including Rosneft’s Igor Sechin, are raising the likelihood that Western companies with investments in Russia will be caught up in the economic feud.
BP, in particular, is significantly exposed. It used to be a major owner of TNK-BP, a joint oil venture in Russia, but agreed in 2013 to sell its holdings to Rosneft in exchange for a 19.75 percent stake in Rosneft itself.
Throughout the crisis in Ukraine, BP has maintained its commitment to Russia’s energy sector, and recently reaffirmed that position in response to U.S. sanctions. “We are committed to our investment in Rosneft and intend to remain a successful long-term investor in Russia,” BP said in a statement.
Related Article: Short-Sighted Europe Cannot Resist Russian Gas
BP is not the only major oil company that stands to lose as a result of sanctions against Moscow. ExxonMobil is heavily invested in developing the Russian Arctic in cooperation with Rosneft. While exact figures haven’t been disclosed, some analysts believe that Russia accounts for 6 percent of ExxonMobil’s total oil production. ExxonMobil has not commented on the latest round of U.S. sanctions.
Standard and Poor’s cut the credit rating of Rosneft after it learned that CEO Sechin was on the list of Russian individuals who were sanctioned. The company’s rating was downgraded to “BBB-“ from “BBB.” The company also lost 2 percent of its value on Moscow’s MICEX index, despite a positive day for other Russian stocks.
By Charles Kennedy of OIlprice.com
Charles is a writer for Oilprice.com