The U.S. has tightened its grip on Russia through an expansion of its previously announced sanctions covering Russia’s oil industry, due to the latter’s involvement in the Ukraine crisis.

Under a new rule, the U.S. Bureau of Industry and Security (BIS) has added a Russian oil and gas field, the Yuzhno-Kirinskoye Field located in the Sea of Okhotsk, to the Entity List.

The Entity List identifies “entities and other persons reasonably believed to be involved, or to pose a significant risk of being or becoming involved, in activities contrary to the national security or foreign policy interests of the United States.”

Gazprom-run Yuzhno-Kirinskoye gas and condensate field was discovered in 2010. It is located in the Sea of Okhotsk, 35 kilometers to the north-east offshore the Sakhalin Island and 6 kilometers to the south-east of the Kirinskoye field. The sea depth in the field ranges from 110 to 320 meters.

Providing rationale for the inclusion of the field on the sanctions list, BIS said that the Russian field is reported to contain substantial reserves of oil in addition to reserves of gas. “The U.S. Government has determined, therefore, that exports, reexports, and transfers (in-country) of all items subject to the Export Administration Regulations

(EAR) to this Russian field by any person without first obtaining a BIS license present an unacceptable risk of use in, or diversion to, the activities specified in the Russian industry sector sanctions,” BIS said in a statement Friday.

As for any potential licence sought to do business in the field, BIS said: “License applications for such transactions will be reviewed with a presumption of denial because such

exports, reexports, and transfers (incountry) are for use directly or indirectly in exploration or production from a deepwater (greater than 500 feet) project in Russia that has the potential to produce oil”

Thus, as part of the BIS ‘‘is informed’’ process, this final rule adds this Russian field to the Entity List to further implement the Russian industry sector sanctions.

U.S. Treasury on September 12, 2014, imposed sanctions that prohibit the exportation 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, but not gas, to five Russian energy companies – Gazprom, Gazprom Neft, Lukoil, Surgutneftegas, and Rosneft – involved in these types of projects.

Source: www.offshoreenergytoday.com

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