Europe’s Largest Oil Producer Backs Sanctions against Russia

North Atlantic's West Navigator, hired by Rosneft
North Atlantic’s West Navigator, hired by Rosneft

The Norwegian Government has decided to back the restrictive measures against Russia, according to the Norwegian Foreign Affairs Ministry.

Norway has since the start of the crisis in Ukraine stood together with the EU and neighboring countries in our reactions to Russia’s violation of the international law. We will do the same this time,” says Foreign Minister Børge Brende.

The Norwegian Parliament’s foreign relations and defence committee discussed the sanctions at an expanded meeting on Monday.

According to the preliminary conclusions, the government has a majority in the Parliament to move ahead with the decision, as opposition leaders are poised to back the decision too.

The EU has adopted a set of sanctions against Russia as a reaction to Russia’s annexation of the Crimea and Sevastopol, targeting sectoral cooperation and exchanges with the Russian Federation.

“The restrictive measures will cover the financial, defence and oil & gas sectors”

The sanctions imposed on Russia are aimed at banking, energy and defense industries, including the Russian shipping and shipbuilding industry.

As explained by the Norwegian Ministry of Foreign Affairs, the restrictive measures will cover the financial, defence and oil & gas sectors.

In particular, export of certain categories of goods for Russia’s oil & gas industry will require preliminary permit from the Norwegian authorities. It is prohibited to supply equipment and services for deepwater exploration and production of oil and project on development of Russia’s Arctic fields. The ban is applicable only to new contracts. Financing of the mentioned goods and services will also require a preliminary permit.

Restrictions have also been introduced on the terms of financing of Russian projects and companies. Supply of defence products and dual use goods has been banned as well.

Specific sanctions have been imposed against goods produced in Crimea. It is not allowed to supply equipment, technologies and finances for Crimean companies’ projects related to transport infrastructure, telecommunications and production of oil/gas/mineral resources.

Two weeks ago, Norwegian oil giant North Atlantic Drilling Ltd., a subsidiary of Seadrill, announced that 6 binding offshore contracts have been executed with the Russian counterpart Rosneft Oil Company. The total revenue potential for the six contracts exclusive of mobilization is approximately USD 4.25 billion.

 According to the agreement, any break rights expire after 100 days. The executed contracts include 5 year contracts for the West Navigator, the West Rigel, the West Alpha, two newbuild CJ-54 class rigs, and a 2.5 year contract for a Gusto class Jack-up rig. These contracts commence in Russian waters from 2015 through 2017.

As Russian oil major Rosneft has been included in the economic sanctions package issued by the US Government and the EU in July, Rosneft managed to secure the technology from North Atlantic Drilling that will be barred under U.S. and European Union sanctions taking effect in the beginning of August.

World Maritime News Staff, August 12, 2014