Kremlin officials have hanging out the prospects for a lucrative investment deal for American energy companies, and apparently President Trump has given him a big economic situation to end the war in Ukraine and abolish economic sanctions in Russia. It appears they are trying to convince them that profits could come from surveillance with Moscow.
There is no doubt that there is a huge amount of oil and natural gas in Russia, but efforts to seduce American or other Western energy companies to take on Russian projects are skeptical, especially due to recent history in Russia. You may encounter it.
Nevertheless, Kremlin finance manager Kiril Dmitriev last week expressed optimism about the outlook, pitching potential investment opportunities by Western companies, including oil producers.
Energy companies need to weigh access to most of oil and natural gas to potential pitfalls, including reputational damage from participating in an industry that has financially maintained government navigation wars against their neighbors. there is.
“There's always been a huge resource and scale in Russia,” says Ben Cahill, an energy analyst at the University of Texas at Austin, for large energy companies. “But the risk on earth is the killer,” he added, using industry jargon for political and legal issues.
After the collapse of the Soviet Union more than 30 years ago, western energy giants, including Exxon Mobil, BP and Shell, have carved their role in the Russian oil industry for years.
However, when Moscow invaded Ukraine in 2022, all of these companies were forced to either put their businesses on ice or leave, leading to billions of dollars being amortized. During its involvement in Russia, companies including London energy giants, including BP, have been encountered office and other harassment attacks.
“Would they tell you that they had a happy experience?” Tane Gustafsson, a professor of government at Georgetown University, asked him that he had written several books on the Russian energy industry.
Still, there appears to be a potential route for oil companies to return to Russia. For example, Exxon Mobil has abandoned its role in a valuable oil project that had been operating for 20 years on Sakhalin Island in the Russian Far East, leaving its interests behind. “There's a possibility of a return,” said John Gawthorp, an analyst at Argus Media, a London research firm.
Exxon Mobil was thought to have a relatively good relationship with Russia's partner Rosneft, a state-run oil company. And they were envisaged to take part in other ventures, such as work in the Arctic and shale drilling, which were excavated 10 years ago. These activities were blocked by sanctions after Russia bought Crimea in 2014.
Exxon Mobil declined to comment on the resumption of work in Russia. It amortized $4.6 billion on the Sakhalin project, and in a regulatory filing in 2023, management said it deemed the asset's “carrying value” unrecovered.
The return of Western companies to Russia could require the end of the Ukrainian conflict and the removal of the widespread sanctions imposed by the US and the European Union on Russian oil and gas-related activities and entities. Analysts say American companies could be easier to return than their European counterparts as Washington appears to be more likely to lift restrictions than Brussels.
The energy giant, which will take years to complete, must be convinced that if government changes in the US or new invasions by Russia, should not face new restrictions in the next few years.
“It would be very surprising to me if a US company would make a big investment in Russia,” said Edward, a former State Department official for sanctions on Iran and author of a coming book called “Chake Point: American American.” Fishman said: Power in the era of economic warfare.”
Taking the rap from the Russian industry may not be in the interest of some of the American energy industry. For example, lifting curbs imposed by the Biden administration targeting Russian liquefied natural gas exports will bring more competition for LNG from the US, which has replaced European Russian gas in the past three years. It may be. “Russian LNG in the global market is a direct competitor of USLNG,” said James Waddell, gas analyst at research firm Energy Aspects. “This is not something the US administration is willing to easily pass it on.”
Analysts also say the energy industry has changed since the beginning of this century. The US Shale Boom is giving companies like ExxonMobil and Chevron an alternative to potentially risky international theatre.
“The US majors have much more attractive opportunities elsewhere in the world,” says Tatiana Mitrova, a researcher at the Global Energy Policy Center at Columbia University, including the Gulf of Mexico, Brazil and Guyana. Ta. “Why should they choose Russia, and does it have a high political risk?”
Analysts say energy companies may no longer see the potential Russian jackpot that was there after the collapse of the Soviet Union.
At the time, the application of Western technology to the vast amount of Russia's resources significantly increased Russia's production. The feat is unlikely to be repeated. “We're looking forward to seeing you in the future,” said Peter McNally, global head of sector analysts at Third Bridge, a research firm in New York.
During the three years of sanctions, Russia developed its own technology and now has support from its main oil clients, China and India. “For me, it's a questionable mark whether US companies will be welcomed as equal partners,” Mitrova said.
The Russian oil industry and government have always been ambiguous about sharing wealth with foreign investors. BP successfully completed the Russian oil company at the beginning of this century, but was subject to harassment, including raids on the premises by armed security guards. Bob Dudley, the chief of a local business who later became BP's CEO, was forced to flee Russia.
In 2013, BP was able to exchange Russian holdings for packages, including nearly 20% stake in Russia's largest oil company, Rosneft, for Russia's largest oil company. and received a $24.4 billion bill. Dividends from stockholdings are paid to restricted Russian bank accounts that BP has no access to.
Earlier this month, BP's current CEO Murray Auchincloss brushed off an analyst's question about returning to a more normal approach to Russian ownership. “Our main focus is now on selling stocks,” he said.
Of all the large Western energy companies, France's total cheeky mouth appears to be the perfect way to return to business as normal in Russia, if the political situation allows. The company amortized $14.8 billion for its Russian operations in 2022, but from a facility called Yamal, which helped develop in the Russian Arctic Circle, a Russian gas company owns 19 by the French company. We continue to import liquefied natural gas. Percent shares. Totalenergies declined to comment, but said that these cargoes contribute to Europe's energy security.
Analysts say repayments can be easy for small businesses that provide services such as hydraulic fracturing and other technical support. Formerly Schlumberger, SLB, is one of the biggest such companies, has continued to cooperate in Russia and has stated it complies with sanctions.
These companies “trained a large number of Russian oil workers, the backbone of today's industry now that Westerners have almost left,” Gustafson wrote in his upcoming book, Perfect Storm. Masu.
Rebecca F. Elliott Reports of contributions.
