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Factbox: Potential impacts of US lifting sanctions on Russian oil sector

Washington — US President Donald Trump said Friday ahead of his first conversation with Russian President Vladimir Putin since taking office that it was too soon to know whether to continue US sanctions against Moscow.

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Trump has promised to take a softer approach to Russian relations than his predecessor, fueling speculation that he could lift the sanctions.

Related: Find more content about Trump's administration in our news and analysis feature.

"We'll see what happens," Trump said during a joint press conference with UK Prime Minister Theresa May. "As far as the sanctions, [it's] very early to be talking about that."

Trump and Putin are scheduled to speak Saturday.

"I don't know the gentleman," Trump said. "I hope we have a fantastic relationship, that's possible. And it's also possible that we won't. We will see what happens. I will be representing the American people very, very strongly, very, very forcefully."

May took a firmer stance, saying the UK would continue to argue within the EU that it must keep Russian sanctions in place until Moscow fully complies with the 2014 Minsk Protocol.

"We have been very clear that we want to see the Minsk agreement fully implemented," she said.

The sanctions imposed in 2014 in response to Russia's role in the Ukraine conflict have had a significant impact on the investment climate in Russia. They froze several major upstream oil joint ventures between Russian and Western firms, with ExxonMobil taking an estimated $1 billion hit.

Former ExxonMobil CEO Rex Tillerson's nomination to be US secretary of state is on track to be confirmed by the Senate, likely next week, after three key Republican senators previously skeptical of his Russian ties said they would support him.

The following is a list of key sanctions imposed on Russia's energy sector by the US and the EU. Other countries, including Japan, Canada and Australia, have also introduced sanctions against Moscow.


* The US Treasury imposed sanctions that prohibit the export of goods, services or technology in support of exploration or production for Russian deepwater, Arctic offshore or shale projects that have the potential to produce oil, targeting five Russian energy companies: Gazprom, Gazprom Neft, Lukoil, Surgutneftegas and Rosneft.

* The Treasury also imposed sanctions that prohibit transactions in, provision of financing for, or other dealings in new debt of greater than 90 days maturity to Russian energy companies including Gazprom Neft, Transneft, Rosneft and Novatek, as well as banks including Russia's largest bank, Sberbank.

* The US sanctioned some key oil and gas company bosses, including Rosneft CEO Igor Sechin and Gunvor co-founder Gennady Timchenko, as well as Arkady and Boris Rotenberg, brothers whose firms provide construction services to Russian state-owned gas giant Gazprom.

* Crimea-based companies were also sanctioned, including Feodosiya Enterprise, which operates a key shipping facility for oil imports and exports. The company had been controlled by Ukrainian state-controlled Naftogaz prior to the annexation of Crimea. Crimea-based gas company Chernomorneftegaz, which came under the control of the Russian government but had been a subsidiary of Naftogaz, was also sanctioned.


* Rosneft, Transneft and Gazprom Neft are restricted from raising long-term debt with European banks. Under the measure, EU banks are banned from providing or dealing with transferable securities and money-market instruments with a maturity exceeding 30 days to the three companies.

* EU companies are also prohibited from supplying technology for use on deepwater, Arctic or shale oil exploration and production. EU companies are prohibited from providing services including drilling, well testing, logging and completion services, and the supply of floating vessels in these sectors.


* A number of Western companies have had to curtail their plans to cooperate with Russian companies, with Arctic and hard-to-extract reserves particularly affected.

* ExxonMobil has been the most affected by sanctions of the foreign oil majors. In March 2015, then-CEO Rex Tillerson estimated potential losses from the sanctions at up to $1 billion. Exxon was forced to pull out of its cooperation with Rosneft on the Pobeda project in the Arctic Kara Sea as a result of sanctions. Other areas of cooperation between Exxon and Rosneft remain unaffected by sanctions, including the Sakhalin 1 project in Russia's Far East. Its partnership agreements with Rosneft include three blocks in the Kara Sea and a block in the Black Sea as well as a possible LNG plant on the Russian Far East island of Sakhalin, which could see progress if sanctions are lifted.

* In contrast, BP, which holds a 19.75% stake in Rosneft, has seen its cooperation with Rosneft grow since sanctions were introduced. It entered new upstream projects including Taas Yuryakh in East Siberia, and set up a services joint venture with Rosneft and Schlumberger.


* While Russian producers have had to adapt, analysts have said that the sanctions have not had as much bite as expected, and the sector has largely come to terms with them. Western companies have said that while the number of approvals they are seeking to carry out work in Russia has increased, much of their operations remain unaffected.

* The expected negative impact on crude output has also not materialized, with Russia continuing to set post-Soviet output records last year. Sanctions primarily targeted projects that were not set to produce until the next decade, and some analysts have suggested that some cooperation with Western companies stalled due to the fact that these reserves are more expensive to produce than conventional crude, and were not commercially viable when oil prices dropped sharply in the second half of 2014.


* Tillerson's comments about sanctions at his Senate confirmation hearing earlier this month departed from those when he was leading ExxonMobil. He said recent Russian actions have "disregarded American interests," but the US must keep an "open and frank dialogue" with Moscow regarding its ambitions. He said sanctions remain a powerful, important tool of US foreign policy to prevent countries or individuals from taking bad actions or to punish them after the fact. "We need a strong deterrent in our hand," he said.

* In 2014, Tillerson said at ExxonMobil's shareholder meeting that sanctions are not effective unless they are "very well implemented comprehensively, and that's a very hard thing to do." "So we always encourage the people who are making those decisions to consider the very broad collateral damage of who are they really harming with sanctions and what are their objectives and whether sanctions are really effective or not," Tillerson said at the time.

--Rosemary Griffin,
--Meghan Gordon,
--Edited by Annie Siebert,