UK adds heads of Russian energy giants Gazprom, Rosneft to sanctions list

The UK has added the heads of Russian state-controlled energy giants Gazprom and Rosneft to its list of sanctioned Russian officials given the importance of their operations to the Russian state.

In an update to its Russian sanctions list published March 10, the UK Treasury added both Gazprom CEO Alexei Miller and Rosneft CEO Igor Sechin who are now subject to asset freezes.

"As CEO of Gazprom, whose majority shareholder is the government of Russia, Miller is involved in carrying on business in a sector -- energy -- of strategic significance to the Russian government," the list entry stated.

"Gazprom has also provided deliveries of LPG to Crimea, which was annexed illegally by Russia in 2014," it said.

"Miller therefore is involved in carrying on a business in a sector of strategic significance to the government of Russia, has obtained a financial benefit from the government of Russia, and has supported activities which undermine and/or threaten the sovereignty, independence and territorial integrity of Ukraine."

Gazprom is the world's biggest gas exporter and produced some 515 Bcm of gas in 2021, a 13-year high.

Sechin, meanwhile, was described in the updated UK sanctions list as having close personal ties to Russian President Vladimir Putin.

Rosneft, it said, is the leading company in the Russian oil sector whose main shareholder is Rosneftegaz, which is 100%-owned by the Russian state.

"Sechin is involved in obtaining a benefit from and supporting the government of Russia as he holds the position of a director in a government of Russia-affiliated entity and one that carries on business in a sector of strategic significance to the government of Russia," it said.

Rosneft produced 3.9 million b/d of liquids in 2021.

BP holds a 19.75% stake in Rosneft, but said on Feb. 27 that it would "exit" the venture in response to the Kremlin's decision to invade Ukraine.

Neither Gazprom nor Rosneft could be reached for immediate comment on the sanctions additions March 10.

GDR suspension

Both Miller and Sechin had already been added to a US sanctions list in 2018.

Both Gazprom and Rosneft have global depository receipts listed in London, but the London Stock Exchange on March 3 suspended both GDRs from trading.

GDRs are financial instruments issued by banks that represent shares in a foreign company, allowing them to be traded on a local stock exchange.

The suspension is seen as a major blow to both companies and their access to western equity capital markets, and could have an impact on the companies' abilities to raise new funds to finance projects.