Sechin lashes latest US sanctions

Under more pressure: Igor Sechin (left) and Vladimir Putin

Rosneft chairman Igor Sechin has hit out at fresh US sanctions against the Russian oil behemoth, terming them “groundless, biased and illegal,” as the company’s share price slumped in London.

Sechin also said the company believes “preliminarily” that the fresh measures meted out by the US Treasury Department against it and compatriot independent Novatek on Wednesday will not affect its current projects.

Both Russian oil companies were, along with financial institutions Gazprombank and VEB, hit with a “broad-based package of sanctions” stopping them receiving any new access to US capital markets. Sechin himself had already been sanctioned by the US in late April, as the economic powerhouse tries to put pressure on the administration of President Vladimir Putin in the wake of the annexation of Crimea from Ukraine.

“By imposing sanctions on entities within the financial services and energy sectors, Treasury has increased the cost of economic isolation for key Russian firms that value their access to medium- and long-term US sources of financing,” the Treasury said

Under Secretary for Terrorism and Financial Intelligence David Cohen added: “Russia has continued to destabilise Ukraine and provide support for the separatists, despite its statements to the contrary.”

Asked for comment on the sanctions, a Rosneft spokesperson pointed to comments given by Sechin to reporters in the Brazilian capital Brasilia on Wednesday.

“I’d like to mention that, because Rosneft is a major budget revenue-generating entity in Russia, the real target of these sanctions is not the company itself, but the implementation of Russia’s sovereign policy,” Russian news agency Itar-Tass quoted him as saying.

“The decision to put Rosneft on the sanction list is groundless, biased and illegal due to no role of the company in the crisis in Ukraine.

"This decision is also detrimental to American stockholders of companies, American banks which co-operate on credit agreements."

The agency’s report continued: "This is an evidence of the lack of legal approaches to such decisions. We will speak with lawyers, will work, consider and will minimise risks in terms of financial capabilities of the company.

"We believe preliminarily that this does not affect implementation of our current projects.”

When Sechin was himself sanctioned by the US on 28 April, he was similarly dismissive of the measures, telling Upstream: "As Charles Maurice de Talleyrand used to say in such cases: 'Tout ce qui est excessif est insignificant'," referencing the crafty 19th century French diplomat's apparent declaration that 'all that is excessive is insignificant'.

Sechin was one of seven Russian individuals slapped with sanctions at the time, with 17 companies also sanctioned. Rosneft itself was not, however, sanctioned at that time.

The powerful Putin aide continued in April: "We understand that the (US) administration noticed the companies’ active actions aimed at minimising the risks, linked with the unilateral orientation of hydrocarbons exports to concrete regional markets.

"I assume the latest step taken by Washington is a high mark of effectiveness of our work.

"Moreover, we assure our shareholders and partners, including American ones, that this effectiveness won’t decrease, our co-operation won’t be hurt and (Rosneft) will dynamically evolve."

Novatek later responded to the sanctions, vowing that is assets and operations would be unaffected.

Shares in Rosneft were down more than 5% in London at 10am on Thursday, with those of Novatek down almost 10%.

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