Visa Ban on Russian Energy CEOs Could Backfire

Western companies with significant interests in Russian energy stand to lose.

The UK's BP owns 19.75 percent of Rosneft. Shell is part of the Gazprom-led Sakhalin-2 project in Russia's Pacific, which includes Russia's sole liquefied natural gas export plant.

Western banks hold most of the $90 billion in combined debts of Rosneft and Gazprom.

Asia Push

Disintegrating relations with the West could push Russia's energy giants further to the East and encourage them to do more business with China, which earlier this year overtook Germany as Russia's single largest oil buyer.

"It impedes (Rosneft/Gazprom's) ability to do some deals and is annoying and uncomfortable, but it isn't crippling," said Bruce Bower, an analyst at Moscow-based hedge fund Verno, about the threat of visa sanctions.

He added that the move would accelerate Russia's tilt toward the Far East, which started with the building of pipelines to China.

Rosneft has been increasing oil exports to China and targets delivery of nearly 1 million barrels per day there, up from around 300,000 bpd last year. The rise in oil exports to Asia has led to cuts in oil exports to Europe.


123

View Full Article

WHAT DO YOU THINK?


Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.


Most Popular Articles