Russian oil major Rosneft can continue drilling in harsh offshore areas like the Arctic despite EU and US sanctions after signing a $4.25 billion deal for drilling rigs from North Atlantic Drilling Ltd on July 29.
The Norwegian drill rig owner is supplying Rosneft and Exxon Mobil Corp with the kind of high technology that will be barred under US and EU sanctions.
Specifically, the EU sanctions target certain technologies needed for deep-sea drilling. However, Rosneft signed the deal before the sanctions were finalised, so the leases are probably still valid. The sanctions were expected to be possibly valid from August 1 and apply to future contracts.
The rigs are owned by the North Atlantic Drilling unit of Seadrill Ltd.
Seadrill is owned by Norwegian billionaire John Fredriksen.North Atlantic Drilling Ltd, based in Bermuda and listed on the New York Stock Exchange,specialises in drilling into the North Atlantic basin. The North Atlantic Drilling unit is managed in Norway, which is not a member of the EU. However, Oslo has signaled it will probably abide by the sanctions against Russia.
Konstantin Simonov, head of Russia’s National Energy Security Fund (NESF) in Moscow, toldNew Europe on August 1 that Norway will probably also take part in these sanctions and will implement the same restrictions.
“That is why, in my opinion, the Norwegian company signed this agreement with Rosneft one day before sanctions for a very simple reason. Because these sanctions are not concerning the already signed agreements,” Simonov said, reminding that Gennady Timchenko, who was sanctioned by the US Treasury, hassoldhis shares in oil traderGunvo group just one day before the first sanctions.
So far the sanctions against Russia’s energy sector exclude natural gas and conventional crude production. The bans have targeted a narrow list of gear and technologies used in deep-water, Arctic and shale prospects.
Simonov noted that there are loopholes in the EU sanctions, saying that, for example, EU sanctions targeting certain technologies needed for deep-sea drilling allow selling equipment to Russia’s Sakhalin project. “We have no deep-water projects,” he said. “These prohibitions are all against Arctic. We can continue projects in Baltic Sea, Caspian Sea and Sakhalin.”
“Europe is in a very difficult situation. Europe does not want to struggle with Russia but the pressure from the United States is so huge so Europe is trying to find some strange compromises,” Simonov said.
Rosneft Chief Executive Officer Igor Sechin said the deal gives his company an opportunity to lay a sound exploration and development foundation in harsh offshore environments.
Meanwhile, Germany’s Foreign Ministry said Berlin andthe EU are trying toconvince several non-EU countries to join the bloc andthe US inimposing sanctions against Russia forits support ofseparatist rebels ineastern Ukraine.
North Atlantic Drilling CEO Alf Ragnar Lovdal has said the contract for the rigs is in line with the timetable agreed earlier this year.The agreement with Seadrill allows Rosneft to use the six rigs until 2022.
http://www.neurope.eu/article/rosneft-exxon-duck-us-eu-sanctions-arctic