Exclusive: Sanctions gap lets Western firms tap Russian frontier oil

3 Aug 2017   Russia, USA

A gap in U.S. sanctions allows Western companies to help Russia develop some of its most technically challenging oil reserves, and risks undermining the broad aim of the measures, a Reuters investigation has found. When Washington imposed the sanctions on Moscow in 2014 over its annexation of Crimea and role in the Ukraine conflict, the U.S Treasury said it wanted to “impede Russia’s ability to develop so-called frontier or unconventional oil resources”. The restrictions were designed to prevent Russia countering declining output from conventional wells by tapping these hard-to-recover reserves which require newer extraction techniques like fracking, an area where it relies on Western technology. Three years on, however, Norway’s Statoil is helping Kremlin oil giant Rosneft ( ROSN.MM ) develop unconventional resources while British major BP ( BP.L ) is considering a similar project. Statoil is not breaching sanctions, nor would BP be doing so. […]

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