In the new year with new sanctions

In the new year with new sanctions

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Expert Igor Yushkov, about who is worse, if the U.S. senators will have time to enact a new package of anti-Russian sanctions

Photo: YouTube.com/МТРК “World”

“Never been, here we go again”. The Americans are preparing a new package of anti-Russian sanctions. Individuals and legal entities will be prohibited to invest in oil and gas projects over $20 million in gas pipeline projects more than $5 million, the Bill, inter alia, prohibits the supply of goods, services and technologies. Moreover, sanctions will apply to companies from third countries.

USA — experienced world “sanctions policeman”. In 2014, the office of foreign assets control of the U.S. Treasury Department accused the French Bank BNP Paribas SA in the trade of Sudanese oil, as well as in cooperation with Iran. At BNP Paribas SA was fined $9 billion.

And now we offer the senators the bill is another attempt to isolate Russia’s oil and gas sector.

Such attempts are ongoing the last two years, so we can draw some preliminary conclusions.

Hampered the actions of the Americans and Europeans, the implementation of domestic projects? Yes, of course. But even if the sanctions the implementation of these projects? I think not. A number of projects were frozen, but not because of sanctions but because of the fall in oil prices.

For example, ExxonMobil had an agreement with Rosneft to develop oil fields on the Arctic shelf and the Black sea, as well as fields with hard to recover oil reserves in Western Siberia. All three projects have a high cost. Even if the price of oil over $100 per barrel production in the open Rosneft and ExxonMobil, the Pobeda field in the Kara sea would be unprofitable.

Similarly cheapened oil would’ve worked on projects in the Black sea, and tight oil.

A clear example of the financial sanctions was the project of NOVATEK (included in the black list of States) “Yamal LNG”. Shareholders had planned to raise $20 billion project financing of the $27 billion total cost. In the end, less attractive terms, delayed, but still was the loan facility from the Chinese banks. And at the end of 2016 on the financing of Yamal LNG announced the Japanese Bank JBIC and Italian banks, including Intesa.

The new bill U.S. senators aim to block Russian companies an opportunity to develop cooperation with foreign companies.

What projects in Russia may suffer in the case of approval of the bill?

First, the US can demand from investors from other countries to translate the Russian companies the credit agreement which has been reached. It may affect the same “Yamal LNG”, which will not come to Japanese, Italian and Chinese money.

“Gazprom” will not receive loans from the Japanese Bank Mizuho, Sumitomo Mitsui Banking Corporation and U.S. Bank JPMorgan Chase, which agreed on the loan in December 2016. The money they planned to spend on the construction of “Nord stream-2”, “Turkish stream and Power of Siberia”.

Second, the bill requires the investment ban, which means that foreign companies cannot buy shares in the Russian projects. Meanwhile, NOVATEK plans to attract LNG project on the Gydan Peninsula foreign investors from Japan, China and India. “Gazprom” and “SIBUR” does not rule out selling stakes in gas processing and gas chemical plants in the Amur region.

The most interesting story may emerge from LNG projects, “Rosneft” and “Gazprom”. The Russian gas concern wants to build a third line of the existing LNG plant on Sakhalin. The new sanctions will prohibit other owners of the plant, Shell and Japanese Mitsui and Mitsubishi, to invest money in it. And Rosneft together with ExxonMobil have agreed to build the plant — “far East LNG” in the Khabarovsk Krai. These projects LNG is extremely beneficial to all participants, as this gas may be supplied to Japan and South Korea with a minimum transport shoulder. And in the far East LNG project can really affect the interests of ExxonMobil.

Thirdly, sanctions should be applied to the Russian gas pipeline projects. Probably talking about the “Nord stream-2” and “Turkish stream”. The marine portions of the pipeline “Gazprom” finances independently. But the ship-the pipe layer “Gazprom” were often hired in the Italian company Saipem. In 2016, the Russian companies had his own vessel-pipelayer, but whether it is the ship to build the “Turkish” and “Nord stream-2” is not yet known.

We also reviewed the Russian projects can suffer from new U.S. sanctions, but there is a sense to put the question another way. Will do the us authorities to aggravate relations with Russia? Or rather, whether they will go to the aggravation of relations with the elites of Japan, China, EU, India and other countries, who are clearly not interested in breaking energy relations with Russia? The problem for the initiators of the sanctions that the bill is another attempt to stick it to Trump, so he had to deal with these problems. But will American politicians to approve the bill in the remaining days of the Obama presidency?

The author is an expert of the Financial University under the government of the Russian Federation, a leading analyst of the national energy security Fund

The opinion of the author may not coincide with the position of the editorial Board