American news sources have hinted that the USA is shortly to announce additional sanctions against the Russian government, and will do so by targeting those oil businesses which have joint operations in the Arctic. This move will also be problematic for ExxonMobil, which also has a JV arrangement with Rosneft worth $500 billion USD for Arctic drilling.
If the sanctions are announced, they will follow drilling between Exxon and Rosneft in the Kara Sea. The US government hopes that by removing Western financial support for large-scale oil developments, the Russian economy will be impacted. The move will come after a prolonged period of unusual operations in the oil industry, where relationships between US and European oil companies and Russian ones have felt constrained by the escalating sanctions.
This latest move could see the West cut off ties with Russia in an area where joint exploration has traditionally been strongest. Other major oil companies that have worked with Russia’s energy giants are Chevron and Exxon. Royal Dutch Shell also has significant investment in Russia, including shale gas exploration and projects designed to grow crude oil output from Russian fields. Additionally, BP owns over 19pc of the state-controlled Russian oil giant Rosneft, so the effects of escalating sanctions are also likely to be felt by Western investors.Last updated on 04:42PM - 01/10/14