In the light of the continuing conflict in the Ukraine, the EU adopted a number of sanctions against Russia at the start of September. The sanctions adopted by the Council on 8 September 2014 according to Council Regulation no. 960/2014 have been implemented. The sanctions intensify previous sanctions against Russia adopted by the EU earlier this year in July.

The adoption of the new sanctions are of significant relevance to oil companies and suppliers providing services to the Russian oil and gas market.

Sanctions of particular interest are:

  • A prohibition against providing certain services necessary for deep water oil exploration and production, Arctic oil exploration and production, or shale oil projects in Russia. The services include drilling, well testing, logging and completion services and supply of specialised floating vessels. 
  • Further restrictions on access to the capital market for certain Russian companies. The prohibition will thus affect large Russian oil companies such as Gazpromneft, Transfnet and Rosneft.

Previous sanctions

The previously adopted sanctions against Russia also affect the oil industry and are still effective.

The sanctions, implemented according to Council Regulation no. 833/2014, contain a prohibition against export of certain products to Russia if there is reason to believe that the products are to be used for projects concerning deep water oil exploration and production, Arctic oil exploration and production, or shale oil projects in Russia. Technical assistance or intermediary services in connection with such products also require authorisation. In addition, authorisation is required for financing or financial assistance relating to the above products when exported to Russia. 

Impact on Danish companies in the oil industry

Danish companies dealing with the Russian oil industry should refrain from entering into agreements concerning the above products and services. It should be noted in particular that the prohibition against delivery of services and the prohibition against sale and export of certain products to Russia apply to both direct and indirect delivery or sale and export.

contacts

Søren Hornbæk Svendsen

Partner

Christian Tullberg

Partner

Anne-Sophie Kämpf Svane

Attorney