Statoil, Rosneft delay Siberian drilling, while CEO Sechin added to international sanction list

Rosneft CEO Igor Sechin, supposed to be a member of Putin's inner circle, has been added to the list of individuals sanctioned by the US and EU over Ukraine.

The growing list of individuals sanctioned by the US and EU over the Ukrainian crisis now includes Rosneft CEO Igor Sechin. The planned partnership between Statoil and Rosneft has been postponed, but Statoil insists the postponement is unrelated to the sanctions.


Norwegian state-owned energy giant Statoil and Russia’s Rosneft announced yesterday their planned partnership in West Siberia has been delayed until next year. 

Meanwhile Rosneft CEO Igor Sechin, 53, was put on the US’s sanction list over the continuing crisis in Ukraine. Sechin is believed to be a valuable member of Putin’s inner circle, at one point serving as Deputy Prime Minister. Rosneft provides a substantial portion of Russia’s state revenue.

Statoil has denied the postponement is due to the events in Ukraine, blaming weather conditions instead.

“This is quite normal in [our] operations,” said Knut Rostad, a Statoil spokesperson, when reached for comment on Tuesday. Accordingly, the company did postpone other major projects in the Arctic last summer in the Barents Sea and Chukchi Sea due to weather-related difficulties.

As of last year the two oil companies had planned to cooperate in North Komsomolskoye, a region of West Siberia, as well as on projects in the Sea of Okhotsk, the Barents Sea, and another onshore shale oil project in the Stavropol region. The partnership is 33.3 percent owned by Statoil, which is supplying the technical knowhow that Rosneft lacks in Arctic offshore operations.

Statoil isn’t the only company whose relationship with Sechin has been complicated by the sanctions. ExxonMobil, the second largest oil company in the world by revenue, has a US $500-million partnership with Rosneft to drill in, among other areas, the Kara Sea north of Siberia. That project alone is expected to yield 9 billion barrels of oil, worth $900 billion at today’s prices.

British oil company BP and Italian firm Eni SpA also have major stakes in Rosneft’s ability to cooperate with foreign partners. BP owns 20 percent of the Russian company, and the partnership with Eni SpA is due to have exploration wells drilled before 2020.

According to a senior US administration official in a conference call on Monday, this complication of energy operations is a central purpose of the sanctions. 

“We are ratcheting up this pressure to impose very concrete economic costs on the Russians through these types of sanctions,” he said. “But of course, everybody knows who Sechin and [sanctioned industrialist] Chemezov are, and the role that they play in both the Russian economy and, frankly, in the leadership circle in Russia.”