In June, the U.S. Senate passed legislation (S. 722) to strengthen U.S. sanctions on Iran and Russia. Provisions in the bill targeting Russia’s energy sector, could potentially have the unintended consequence of threatening many ongoing and future business activities of PESA member companies and other businesses in the oil and natural gas industry.
Current sanctions prohibit U.S. companies from working on oil projects in Russia’s deepwater, Artic offshore, and shale plays. S. 722 expands this prohibition, barring U.S. companies from taking part in any project across the globe in which a Russian sanctioned energy firm participates, regardless of their level of involvement. This unilateral escalation of sanctions, while justified, has the potential to significantly undercut U.S. competitiveness.
The Senate bill currently awaits action by the U.S. House of Representatives. In letters to members of the House Leadership, PESA urged the legislation be modified by either (1) limiting the prohibition to energy projects within Russia or (2) establish a threshold limiting the prohibition to projects controlled by sanctioned Russian energy firms.
PESA will continue to educate policy makers on the impact of the specific Russian energy provision. For further questions, please contact PESA Sr. Director of Public Policy, Jean Gould.
PESA quoted in Financial Times:
Russia sanctions risk ‘unintended consequences’, oil sector warns