This briefing by Platform, Greenpeace UK and ShareAction outlines the main European and US sanctions that impact IOCs operating in Russia. It details the impact of these sanctions on planned joint ventures involving Exxon, Statoil, Eni and Shell. It also examines the unique consequences for BP as a holder of a 19.75% stake in Rosneft resulting from the financial impact of sanctions on Rosneft. Finally, it suggests a number of questions for BP shareholders to ask in assessing risk.
The deterioration of Russia’s diplomatic relationships with the US and Europe – culminating in the introduction of economic sanctions – threatens the commercial viability of a number of alliances between international oil companies (IOCs) including BP, Exxon, Statoil and Eni and Russian state-controlled companies Rosneft and Gazprom. As detailed in our 2013 report Russian Roulette: International Oil Company Risk in the Russian Arctic, these alliances involve an exchange of IOC technical expertise and capital in return or access to the Russian offshore Arctic. They also rely on long-term political stability and support from Russia in the form of favourable tax incentives and the renewal of licences.
Published ahead of BP’s SRI day for investors, this briefing forms part of Platform, Greenpeace UK and ShareAction’s project to engage institutional fossil fuel investors on risk in frontier oil projects.